Jeremy Jones

August 9, 2014

Incentives for Adults
Incentives have been part of society that aids parents to teach children good
behavior as well as construction of good work ethics, progress and more. Incentives
are used as part of compensation for workers, commission for sales representatives
that work efficiently and for the labor force that wishes to excel to higher
management positions. In a recent decision the wife and I found that incentives for
adults are not limited to just what was mentioned above. More so incentives are
motivational tools for milestone marks in school, marriage, graduation, promotions
and mostly accomplishing goals.

At the beginning of June, the wife and myself found ourselves pondering if we
should go on vacation at the end of the summer semester at Salt Lake Community
College (S.L.C.C) or at a different time of the year. After talking with extended family
we decided to take a cruise at the beginning of January the week before school
starts. In making this decision we had to wade through the supply side of what
cruises charge, demand from the public and what they are willing to pay along with
the price elasticity of cruises during low times and peak times (mostly holidays).

For incentives to work there must be goals or conditions that are meet and
have to be something [you] strongly desire to have or to do (Markese, Sarah.) As a
family we used this rubric and found that we could justify going on a leisurely
vacation to celebrate graduation from Salt Lake Community College because higher
incentives will lead to more effort and higher performance according to Meier and
Gneezy (page 1). Finding what cruise to take and how much we were willing to pay
was the hardest part.

We looked at Norwegian, Royal Caribbean, The Princess and others. First we
wanted to go on a cruise for Christmas vacation with other family members but
soon found out that each cruise line charged about double the normal rate from the
week prior to New Years Day. During this period of time traveling agencies and
other agencies like cruises or venture parks know that they can control mark up
their prices because of supply. It is a time when there is a greater demand for those
services and because more people want in. Those traveling agencies can charge
more to those that are able and willing to pay since for example cruise line have a
fixed supply of rooms and want to maximize their dollar ratio.

This is another example of how elastic or flexible this section of the market is.
During the regular season in winter and other low times of the year prices are
competitive from one firm to another so they drive prices down that they may get
those additional customers to purchase tickets with them. When it is high peak
season each will adjust its prices higher (for the most part) to compete in the same
manner. Because of these high times and other factors of the economy recession
and wages, vacations are elastic meaning that when prices change so too does the
demand for their products. It is a luxury people will forgo unlike wheat or rice,
which is inelastic and has the same demand from consumers even though its prices
may still change.
The last factor the family needed to determine was how much demand we
were willing to accept and therefore forgo money for the extra benefit of time with
family and fun. Ultimately we found that price was the biggest issue. Even though
we could have found more advanced boats with more things to do, it was better to
stay within a budget. So we decided to book a vacation a few days after New Years
and received a much lower rate. This was derived because demand from consumers
fell dramatically after the holiday season was over; thus rendering agencies to drop
their prices. One technique worked especially well that sold us over buy one get
the other half off deal.

After finalizing the deal it soon became a top priority to take all the classes
necessary to graduate by December. So for the summer and fall semesters 0f 2014
we came to the conclusion that I had to take six or more classes each semester in
order to achieve this goal. So far I have gone through one semester while
maintaining an A average. To demonstrate why travel incentives work so well the
Center for Concept Development stated 51% of respondents perceived that travel
is remembered longer than other incentive rewards (Hein, Kenneth). Because it is
a long-term goal with a greater marginal benefit to cost ratio (for time and effort put
into school) it becomes a highly effective method for success. Why? Because the
incentive outweighs the energy put into achieving the goal.

REFERENCES:
-Hein, Kenneth (1 February 2006). Inventive
Magazine http://www.incentivemag.com/Incentive-
Programs/Consumer/Articles/Anatomy-of-an-Online-Incentive-Program/.
Retrieved 14 July 2014.

- Markese, Sarah 2013. Motivating Children to Positive Change: Simple
Steps to Using Incentives.
http://www.familycompassgroup.com/articles/behavioralEmotionalParentingChall
enges/130611_motivatingChildren.php retrieved 8 August 2014.

-Meier Stephan and Uri Gneezy (fall 2011). Journal of Economic
Perspectives- Volume 25 pages 191-210. When and why incentives (dont) work to
modify behavior.