Question

The City of Milwaukee has instituted a new "game" by which it hopes to incentivize motorists from speeding on the expressway. There will be a lottery, and all motorists that are not caught speeding will by given a single, free entry, and can win thousands. However, if caught (by cop or camera), a motorist will become ineligible for the lottery, and will have to pay a hefty fine. All fines go to pay for the lottery winnings. Knowing what you do about incentives, do you think the lottery will reduce speeding violations? What might be an unintended consequence of this idea?

Answer 1

Yes, the lottery will help in reducing speeding violations in the city as the incentive provided to the motorists is huge. Also those who will not follow the speeding instructions will be fined heavily. Ans this money will be used to pay the lottery. However, in the long run when all the motorists will start obeying the speeding instructions the fine collection charges will fall and government will have to use its own funds to pay the lottery. If the amount declines, then the motorists will lose incentive to ride slow and then they will gain start violating speeding instructions. Thus, it is only short term remedy to control speed and not a permanent solution.