You are here: Home > Fitness Focus > Why Incentives Work
Why Incentives Work

The History of the Token Economy

The use of incentives to encourage desirable behaviors and deter undesirable behaviors was long ago dubbed the “token economy.” Token economies (involving cards, trinkets, money, etc.) to enhance or deter behaviors have been in place, according to Liberman (2000), for more than 50 years. This tactic is a type of reward system used with children, adults and animals. The approach grew out of the work of B.F. Skinner, the famed behavioral psychologist, and his operant conditioning principles.

In the early 1960s, the token economy method was primarily used with mentally-ill patients and animals (Jackson & Hackenberg, 1996). More recently, the strategy has emerged as a means of assisting people of all ages and psychological abilities to learn to better manage their behaviors.

The logistics of the token economy have a mixed history of endorsement and criticism. In the 1970s, researchers Kazdin and Bootzin (1972) demonstrated that token economies were being applied in a wide range of settings. They further stated there were several advantages for researchers, therapists and teachers in using tokens to establish—or at least encourage—desirable behaviors. During this same time period, another study by Paul and Lentz (1977) demonstrated the superiority of the token economy approach over the standard psychological therapy in use at that time.

The Validity of External Incentives

Despite their endorsement of the token economy, Kazdin and Bootzin (1972) noted some potential downsides. They warned that some obstacles may impede the effectiveness and/or implementation of this therapy. These obstacles include staff training and time demands, adult client resistance, and client dependence on tokens and consequent lack of intrinsic motivation (known as the failure to generalize). The authors issued this warning: “Although token economies are successful while in operation, the issue of generalization of behavior gains or resistance to extinction has not been given careful consideration” (p. 343). Another publication by Kazdin (1982) raised certain ethical issues, such as whether it is justifiable to provide cigarettes as reinforcements for desirable behavior and whether it is appropriate to implement “reward and punishment” systems as a means of treatment.

During the decades bookending the start of the 21st century, there emerged other opponents of using rewards to stimulate behavior change. One outspoken protagonist was Alfie Kohn, an American author and lecturer. Kohn (1993) strongly criticized the use of incentives—such as grades, stars and praise—to motivate young people. While his writings are interesting and at times compelling, he unjustifiably denigrates much of the evidence (from studies highlighted here, randomized control studies, empirical observations and sales data) supporting the effectiveness of the token economy for the purpose of helping people (both young and old) to increase desirable behaviors and/or decrease undesirable behaviors.

More recently, surveys, studies and scholars (Shean, 2009; Dixon, et al., 2010) have supported the veracity of the previously quoted studies and have spoken on behalf of the token economy as an effective treatment method. The research of Matson and Boisjoli (2009) provides another such example. They noted, “[O]ne of the most important technologies of behavior modifiers and applied behavior analysts over the past 40 years has been the token economy” (p. 240).

Using Token Economies with Children

As mentioned previously, in the early years of the token economy, most of the collected data centered on the issue of assisting adults with brain disorders. But more recently, attention has been focused on youth (both those with special needs and those without). Studies from Zlomke and Zlomke (2003) and LeBlanc (2004) have confirmed the token economy’s effectiveness in increasing attentiveness, decreasing disruptive behavior, increasing intrinsic motivation to complete assigned work, and promoting better social behavior.

A recent survey addressed three important examples in which actual monetary incentives were used to encourage desired behaviors (Gneezy, Meier & Rey-Biel, 2011). The behaviors evaluated were education, increasing contributions for the common good of the community, and helping people change their lifestyles. For the purposes of this article, the focus will be on the results from the education study only. The researchers summarized their findings as follows:

  1. Incentives work well for increasing attendance and enrollment. Furthermore, “Programs using incentives to reward enrollment and school attendance in the short term is positive” (p. 196).
  2. Incentives have mixed results on effort and achievement. In addition, “[The] overall effects of the incentives were modest with a significant effect for students on the threshold meeting the achievement standard” (p. 197).
  3. Incentives seem to work for some students, but not for all. Nonetheless, “These [rewarded] students continued to outperform their control group peers in the long run after the incentives ended…” (p. 197).

One of the most recent and inclusive reviews (2013) involved a team of researchers from Gonzaga University (Doll, McLaughlin & Barretto), who evaluated the use of token economies in various home and school studies. The criterion for inclusion in the analysis was studies that implemented token economies in academic settings. What follows is an abbreviated summary of their conclusions:

  1. Token economies have been found to be an effective method of behavior management across school and community settings.
  2. There has been a sharp decline in the number of recent studies on token economies since the 1980s. They suggested one possible reason for this decline is that the existing amount of overwhelming data and research corroborates the method’s effectiveness.
  3. Elementary school settings are much more likely to implement a token economy. The studies within this group showed that children who received incentives displayed a clear increase in assignment completion rates, a decrease in inappropriate behavior, higher rates of reaching desired target behavior, and higher rates of appropriate behavior as measured through assignment completion.
  4. Middle school classroom studies showed many instances of increased positive behaviors and significantly decreased inappropriate behaviors as the result of a token economy. Other investigations revealed that social behavior and academic achievement improved with token reinforcement.
  5. Token economies occur much less frequently in high schools than in elementary and middle schools; yet, where token economies were implemented in high school environments, increases in on-task behavior were found.
  6. Community and home programs focusing on token economies were also deemed effective. Implementing the method in children’s homes produced a corresponding reduction or increase in behaviors that are found in the school setting. The provision of tokens at home resulted in improved classroom performance and study behavior. Partnerships between the classroom teacher and parent or guardian can play an effective role in behavior modification.

Practical Tips for Token Economy Implementation

These same researchers reviewed some of the criticisms and concerns that have emerged regarding the use of a token economy: accusations of bribery or blackmail, students’ dependence on tokens and consequent lack of intrinsic motivation (failure to generalize), increased staff workload and cost. These are all important issues, which can be addressed appropriately with creative thinking and planning. For example, failure to generalize can be minimized through the following methods:

  • Focusing on one target behavior (e.g. walking five miles) so participants know what they must do to earn the incentive
  • Considering the age, maturity and mental capacities of participants when determining how long it should take to reach the goal (must be reasonable)
  • Selecting incentives that are visible, countable, attractive, and perceived as highly valuable by the recipients (in other words, they should covet the awards because they are meaningful or provide status), or providing backup reinforcers: privileges or activities that are worthwhile (time off, extra playground time, etc.)
  • Giving awards immediately to successful participants when they reach the goal
  • Providing recipients with periodic reminders of the benefits the desired behavior change will confer upon the recipients after the flow of tokens has ceased

The increase to staff workload can be minimized through the following methods:

  • Providing clear and simple directions to staff
  • Selecting uncomplicated target behaviors that are easy for staff members to explain
  • Holding participants accountable for keeping personal records of tokens
  • Ensuring the staff is consistent in maintaining the token economy
  • Providing recipients with periodic reminders of the benefits the desired behavior change will confer upon the recipients after the flow of tokens has ceased

Costs can be managed through the following methods:

  • Selecting target behaviors that are challenging (though still reasonable)
  • Having participants work with staff to select tokens and backup reinforcers
  • Determining token value of behavior on monetary value
  • Providing extra free time (or similar non-cost rewards) to those who reach their behavior goals or demonstrate improvement

The opinion that token economy is nothing more than bribery or blackmail is not widespread, nor does it stand up to common sense. Virtually every culture provides some type of bartering or exchange for goods. It’s also quite safe to say that money, rewards and recognition are desired by all people. If you doubt that statement, ask yourself this question: Do you like hearing “I love you” or “thank you” from others? If so, then you understand the sort of cause and effect that we are talking about, which is far removed from manipulation or bribery.

Setting Up for Success

The token economy is highly effective, and homebrew systems abound. A quick internet search turns up myriads of practical literature, such as Morin’s (n.d.) “Create a Token Economy System to Improve Your Child’s Behaviors” page on, with numerous recommendations for how to incorporate a token economy, in the home or the classroom, for increasing desirable behaviors or decreasing undesirable behaviors.

Works Cited

Doll, D., McLaughlin, T. F., & Barretto, A. (2013 July). The token economy: A recent review and evaluation. International Journal of Basic and Applied Science, 2(1), 131-149.

Dixon, L. B., et al. (2010). The 2009 schizophrenia PORT psychosocial treatment recommendations and summary statements. Schizophrenia Bulletin, 36(1), 48-70.

Gneezy, U., Meier, S., & Rey-Biel, P. (2011). When and why incentives (don’t) work to modify behavior. Journal of Economic Perspectives, 25(4), 191-210.

Jackson, K., & Hackenberg, T. D. (1996 July). Token reinforcement, choice and self-control in pigeons. Journal of Experimental Analysis of Behavior, 66(1), 29-49.

Kazdin, A. E. (1982). The token economy: A decade later. Journal of Applied Behavioral Analysis, 15(3), 431-45.

Kazdin, A. E., & Bootzin, R. R. (1972 Fall). The token economy: an evaluative review. Journal of Applied Behavior Analysis, 5(3), 343-72.

Kohn, A. (1993). Punished by rewards: The trouble with gold stars, incentive plans, a’s, praise and other bribes. New York, NY: Houghton Mifflin Co.

Kohn, A. (2005). Unconditional parenting: moving from rewards and punishments to rewards and punishments. New York, NY: Artia Books.

LeBlanc, G. (2004 Fall). Enhancing intrinsic motivation through the use of token economy. Essays in Education, 11.

Liberman, R. P. (2000, Sept). The token economy. American Journal of Psychiatry, 157(9), 1398.

Matson, J. L., & Boisjoli, J. A. (2009 Mar-Apr). The token economy for children with intellectual disability and/or autism: A review. Research in Development Disabilities, 30(2), 240-8.

Morin. A. Create a token economy system to improve your child’s behaviors. Retrieved from

Paul, G. L., & Lentz, R. J. (1977). Psychosocial treatment of chronic mental patients: Milieu versus social- learning programs. Cambridge, MA: Harvard University Press.

Shean, G. D. (2009 Winter). Evidence-based psychosocial practices and recovery from schizophrenia. Psychiatry, 72(4), 307-20.

Zlomke, K., & Zlomke, L. (2003). Token economy plus self-monitoring to reduce disruptive classroom behaviors. The Behavior Analyst Today, 4(2), 177-182.