Sunday, February 19, 2006
A Creative NASCAR Incentive
A Creative NASCAR Incentive: "Our new “Freakonomics” column, appearing in today’s New York Times Magazine, takes a look at NASCAR’s recent record of crashing and fatalities. Not surprisingly, the Times’s sports section is full of NASCAR articles, since today is the running of the 2006 Daytona 500 (which marks 5 years since the death of Dale Earnhardt). One of these articles, by Viv Bernstein, is about the amazing record compiled over the past several years by Jack Roush’s team, which last year put five drivers in the Chase for the Nextel Cup, NASCAR’s version of a post-season playoff. One interesting point of this article is the response by the rival Hendrick Motorsports team. Team owner Rick Hendrick is offering a $1,248,525 bonus to his staffers if all four of his team’s drivers make the Chase this year. The article doesn’t stipulate who, exactly, are the staffers who get the money, but $1.2 million split among a bunch of people who probably make pretty good money is probably not the prime incentive here; rather, as is often the case with group incentives versus individual ones, the fear of being the guy who holds back the rest of the group is probably a stronger motivation than anything. The economist Roland Fryer tested this idea not long ago among New York City schoolchildren. He was giving out rewards to kid"