5000 pounds offered to students who fail A-levels

One school in the UK is so confident of its success rate that it is offering 5k to any student who doesn't pass their A-levels, conditional on them having good attendance and assignment submission records. The BBC reports "It is the latest example of cash or gift incentives being used in schools - either to encourage good behaviour or to discourage bad." At first glance, offering teenagers money to fail seems counterintuitive as an incentive for performance. But as a signal of the school's confidence in its quality, it clearly has some advantages. However, they should be careful. If I were the type of teenager who valued 5k over my education or if I was pretty sure I was going to fail anyway, then this school would look pretty appealing! Also, marginal teenagers might think that 5k is a lot of money and might also be discounting the future at a very high rate.

Perverse effects of rent controls

The Law of Unintended Consequences or how well meaning policies have counter-productive effects through generating perverse incentives is a staple of introductory microeconomics courses.
This example from Greg Mankiw's blog is particularly nice. Basically, its how universities in New York buy up property, whose prices are depressed due to rent-control. They rent them to faculty & pay them less accordingly. The implicit subsidy is not taxable so the professor's earnings reflect that i.e. they are even lower as a result.