The restrictions on public life imposed by German policymakers are effective measures for containing the coronavirus, but in addition to sanctioning those who breach the rules, instruments should be put in place that reward citizens for responsible behaviour. Mobile devices and systems are particularly well suited for implementing such a system, argues Dr. Dominik Rehse, head of the Junior Research Group “Digital Market Design”.

Dominik Rehse of ZEW advocates a reward for correct behaviour in the Corona crisis.
ZEW economist Dr. Dominik Rehse proposes a reward system for responsible behaviour in the fight again the coronavirus.

When applied correctly, behavioural incentives can facilitate the adherence to societal norms and government regulations. This is particularly the case when the police, law enforcement authorities, and other public bodies are stretched to their limits when enforcing those rules.

Germany is facing an acute crisis. A system which rewards those who act responsibly should be rolled out as fast and widely as possible. The greatest impact could be achieved by relying on structures that are already in place. Mobile devices and networks, which are already used by a large share of the population, would be particularly suited for this purpose and would make fast implementation of the system possible.

Rewards for those who maintain distance from others

At this stage of the pandemic, maintaining distance from others is the most important measure. Those who adhere to this rule could receive rewards from their mobile network providers, companies which are particularly well-suited for this because they have access to extensive, albeit imprecise geographical movement data of their customers. This data is collected via mobile phone antennas that are currently in use and could be exploited to compare current movement patterns with those of the past months.

It would then be possible to reward individuals for maintaining social distance, for example when they avoid large gatherings of other network users. It would not be necessary for the location data to leave the data centres of the mobile network providers, which makes it much easier to comply with data protection regulations. In order to ensure that this system reaches a wide audience quickly, mobile network providers could make use of existing customer contact channels, established payment systems, and contractual relations. Participation in this temporary reward system should be on a voluntary basis, though. Not all network users want to have their movement data used in such a manner. Users should, however, be aware that movement data is always collected due to legal requirements for data preservation, and this reward system might be one of the rare opportunities to benefit from this preservation policy.

The reward system should be structured in such a way that ensures maximum impact. As a possible element, users could receive an initial reward for changing their behaviour since the outbreak of the pandemic, which would attract attention and encourage participation. Users could be compensated in the form of a refund for phone charges or through bank transfers. This scheme could then be continued depending on how users behave over the course of the pandemic. It is crucial to focus our efforts on the immediate goal: all citizens should maintain social distance as quickly as possible and for as long as necessary. In contrast to the actual infection rates, this objective can be measured without delay.

Benefits for those who help trace the route of infection

As the pandemic progresses, tracing the route of infection and testing other people an infected person has come in contact with will become increasingly important. However, as more and more people get infected, it will become increasingly unfeasible to find out this contact information via talking to all people with the virus individually. Contact tracing should therefore be partially automated as soon as possible. “Pan-European Privacy-Preserving Proximity Tracing (PEPP-PT)”, an initiative created by stakeholders in the business and science worlds, could provide the technological basis for such a partial automation. Instead of directly tracing the location, the PEPP-PT system uses a special smartphone app to measure the proximity between infected persons and their contacts via Bluetooth. This system is based on similar initiatives created in Asia. In case of infection, the app provides a way to inform all those who came into contact with the person in question. Further steps to break the chain of infection can then be undertaken.

For these systems to be successful, it is crucial that the respective apps are widely used. Current discussions indicate that individuals will be able to participate on a voluntary basis. Introducing a reward system could, however, significantly increase the users’ willingness to participate in such a scheme. To encourage early adoption, users could, for instance, be given rewards for recruiting new participants, which would be a ‘viral dissemination strategy’ against the virus. Another option would be to grant loyalty rewards to those who use the app for a long time without interruption. Such a reward system could also compensate participants in the form of a refund for phone charges or through bank transfers. Network providers could make direct use of their broad reach in order to encourage participation.

Benefit for those who help others

Acts of solidarity and providing practical assistance to others will most likely become more difficult as the pandemic progresses. Who is willing to go grocery shopping for a sick neighbour during work time while also having to fear for his or her job? In order to help charitable organisations and public institutions bridge this gap, we should consider introducing rewards for those who help others. Following the approach of the Kenyan mobile money service M-Pesa, one option would be to provide vulnerable groups with phone credits that can easily be activated and transferred to those who help others. This would merely require the phone number of the person who volunteers. In this approach, it would also be relatively easy to use existing mobile network structures to make these rewards available.

Alternatively, this could also be done by using a smartphone app developed for this purpose. Ensuring that these systems are available to vulnerable groups in the population is important, however. Elderly people and citizens that do not yet own a smartphone must not be excluded. In general terms, the less complex the system, the more effective it will be.

The resources to establish such a reward system can stem from several different sources. In order to act as soon as possible, it would be advisable for the government and mobile network operators to provide initial funding. For the state, this would be part of the crisis management programme. For mobile network providers, such a financial contribution would not only be a marketing investment, besides moral considerations.

When the pandemic comes to an end, this reward system, which will then be fully established, can be used to boost economic life. Benefits could be paid out as vouchers, which could be donated by local restaurants or retailers and spent to stimulate business recovery, creating a platform of meaningful incentives. Vouchers could also be partially financed by the government as part of a crisis support measure. Government support is then paid out to businesses when these vouchers are redeemed, which would reflect their customers’ appreciation for the respective businesses. When designed correctly, such incentive systems can ensure that support payments are distributed in a more efficient way than lump sum payments.

Designing an effective and targeted system is crucial

Introducing and operating such a bonus system should be closely monitored by scientists. Economists are concerned with the impact of different economic incentives and the design of digital platforms and can therefore significantly contribute to designing effective reward systems. Researchers can also serve as independent referees and continuously and reliably examine the effects of reward systems. All elements of the rewards system must be implemented in such a way that they can be properly evaluated.

All details concerning the design of the reward scheme are important and must be considered carefully. People could, for instance, leave their phones at home when they go out and only pretend to maintain distance from others. It is therefore necessary to verify whether individuals carry their phones with them by contacting them via a short message or automated phone calls on a regular basis. Furthermore, individuals who work in crucial infrastructures could be put at a disadvantage, as their work during the crisis could create movement patterns that reflect more movement and close proximity to others. A bonus system that rewards less movement and physical distance might therefore place them at a disadvantage. Appropriate provisions should be taken to prevent this.

No reward system will be perfect from the start given the current time constraints the pandemic has placed on us. Improvements and adjustments to new developments will be necessary. In this difficult situation, however, quick and pragmatic action far outweighs perfection. 

This piece first appeared on 7 April 2020 in the “Tagesspiegel”.





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