By offering a reward, a principal signals to the agent that the task is undesirable. (If the task were desirable, the agent wouldn’t need a prod.) But that initial signal, and the reward that goes with it, forces the principal onto a path that’s difficult to leave. Offer too small a reward and the agent won’t comply. But offer a reward that’s enticing enough to get the agent to act the first time, and the principal “is doomed to give it again in the second.” There’s no going back. Pay your son to take out the trash—and you’ve pretty much guaranteed the kid will never do it again for free.
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