A tale of hidden incentives

When I started getting contacted about PsychTalk out of the blue by advertisers, I was mildly flattered. The more strangers noticing us, the better! But after a while, I wondered what these ads involved. Upon following up with one suitor, I learned their model was to provide a URL to be linked once within a post on the site for a year. For that small, almost inconspicuous act, I would receive $150 up front. Unlike banner and sidebar ads, it would not be a constant blight on the website. This all sounded easy and easily acceptable until I received the link to the website itself, an online gaming and gambling page. Online gambling in the United States, my country of residence, is mostly illegal. Due to legal uncertainties and reputation issues, Google and Yahoo!  have a policy of selectively turning down gambling ads depending on the type of gambling involved, the age of typical visitors to a site, and the country where the ad is displayed. I, on the other hand, am glad to assert free expression under the First Amendment and warn you to either check laws in your country or only play the client’s non-gambling games.

This dilemma helps illustrate a broader point that economists and behavioral economists make about incentives:  that they are everywhere, powerful and often hidden. Here is a Disney blog slipping in such an ad—would you have caught the hidden ad or realized it was written to make money from your visit? Speaking to the power of incentives, Freakonomics (the book) pointed out that many sumo wrestlers and schoolteachers cheat, especially when the stakes are high, and real estate agents tend to shortchange their customers when there is not enough money in it for them. Disturbingly, people tend to not notice conflicts interest or else they think they are immune to them. Those real estate agents don’t necessarily realize they are not doing the best for their client, and researchers funded by Big Pharma don’t necessarily realize their work is biased. People also respond to incentives of varying intensity: Dan Ariely has found that more people will cheat on a self-scored test if it is shredded first, and they will cheat still more if they pay themselves with tokens to be exchanged for cash. Incentives also need not be money: when an Israeli daycare instituted a penalty fee for late pickups, parents started coming later because they no longer felt embarrassed about it. The shift of reference frame for parents in that study somewhat resembles the logic I would use to defend an ad on my site. (“If I make it transparent, it will cease to be a dirty ad! Just as those daycare parents exchange the honors system for paid service, I can exchange complete purity for honesty.”) As Dan Ariely posits, we all have a “fudge factor,” or a point to which we can breach our usual ethics and still feel we are good people. For the upstanding among us, the extent of the fudge factor is jaywalking, illegal parking and “white lies” once in a while. For the dangerous among us, it is a decades-long Ponzi scheme. I would like to think muddying the site for the price of an eReader makes me more of a jaywalker type. But after all this rumination, where is the ad? It was meant to be here, but the company didn’t like this content. Go figure.

*For many interesting meta-media reports and interviews, check out On The Media. They recently featured Ryan Holiday, who explains “what it is like to bribe the media on behalf of bestselling authors and billion dollar brands” in his book, Trust Me, I’m Lying: Confessions of a Media Manipulator.