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Token Economies: What is a token economy?

Updated on November 18, 2015
The Voucher System:  Behavior Management Program for Home
The Voucher System: Behavior Management Program for Home
An insightful and highly recommended book.If you've experienced stress or frustration with your child's behavior or your best attempts to manage it, this book will prove particularly enlightening.

What is a token economy?

In plain English a token economy can be summarised by the following two points.

  • A token economy system is one in which an individual earns tokens for engaging in agreed upon desirable behaviors and/or refraining from or decreasing certain undesirable behaviors

  • The individual subsequently has the opportunity to trade earned tokens for access to desired items or activities.

Token economies are one of the most flexible and effective behavior management strategies that can be used to motivate and reinforce human behavior. When used properly token economies can help parents, teachers, carers, employers and anyone else who has ever thought or uttered the words ' help me with my kids' , to increase motivation, to improve compliance, to learn new skills, to follow rules, to refrain from breaking rules and much more.They can also teach about and provide people with goals to strive for, a sense of achievement and accomplishment and a predictable way to access desired items and/or activities.

The application of token economies is virtually limitless with common examples of effective applications including; institutions such as prisons and psychiatric units, various treatment programs, places of employment, mainstream educational settings and special education settings in particular, as well as in our very own homes. They can be tailored for one or many settings, for individual behaviors or multiple behaviors, for individuals or for groups and for any combination of said parameters. They can be as simple or as complex as required and are designed with the flexibility to be continually adjusted and updated as necessary in order to maximise their effectiveness.

Token economies are best viewed as a cycle whereby for example an individual goes from;

  1. Having no tokens and therefore no access to items or activities they desire
  2. The individual engages in or performs one or more desired behaviors or in some circumstances refrains from engaging in certain undesirable behaviors
  3. The individual thereby earns and is awarded tokens for engaging in said behaviors
  4. The individual exchanges earned tokens for access to desired items, activities or privileges and then returns back to step 1.

Do token economies really work?

Absolutely they do and they are one of the most powerful long term behavior management strategies that you can possibly use.The greatest example of a token economy ever devised and put into place is ‘money’. Everyday in almost every part of the world people are actively taking part in this type of token economy whereby they usually perform various ‘work tasks’ in exchange for pieces of colored paper and small metal discs or coins or more commonly nowadays electronically generated digits in their bank accounts .

The power of the token economy system that is ‘money’ lies in the wide (almost infinite) variety of ways in which people can exchange these tokens for access to desired items and activities such as food, clothes, cars, homes, holidays, services, entertainment, security, education and so forth. This flexibility ensures the power and position of money as the ultimate token reinforcer for most people. Surely this is all the evidence we need to show how powerful token economies can be at motivating and reinforcing human behavior.

Melissa & Doug My Magnetic Responsibility Chart
Melissa & Doug My Magnetic Responsibility Chart
Visual and appealing materials.Particularly helpful for teaching younger children both what's expected of them and what's in it for them, which is how you'll really motivate that good behavior.

Two factors which heavily influence the dynamics of token economies in general however are:

  1. The desirability of the items and activities on offer: Having rewards that are sufficiently desired by and thus motivating to the individuals concerned is paramount to the success of any token economy system. If the individual has little or no interest in the ‘reinforcers’ being offered they will clearly not be motivated to engage in the target behaviours no matter how elaborate, attractive or sophisticated your system otherwise is.
  2. The effort-reward ratio: If you expect too much and/or offer too little you will have little success. This dynamic is even more important when you first introduce a new system. Initially you should make things easy so as to facilitate success and encourage the individual’s engagement with the new system.

Note: I have often heard people state that they’ve tried token economies or positive reinforcement and that it doesn’t work. This is often because people lose sight of the distinction between a reward and a reinforcer (even if they’re not familiar with the latter term).

A reward could be described as anything you provide to someone as a result of them engaging in a particular behaviour. A reward only assumes the status of or becomes a reinforcer however if it leads to an increase in the targeted behaviour or the maintenance of an already established behaviour/s .e.g. if your boss was to offer or ‘reward’ you with a small pebble or a grain of sand say, for every additional 10 minutes work you completed at the end of your normal day’s work this is unlikely to motivate most people to stay back too late.

However if that same boss was to offer an additional days wages for every extra 10 minutes work or perhaps an additional weeks or even months wages for that same 10 minutes the compliance levels would surely go through the roof. The point being that frequently if a token economy is not working (assuming the principles are understood by the individuals concerned and the criteria for success are within the individual’s range of abilities) it is as a result of either expecting too much for too little or because what’s on offer is not at all or not sufficiently motivating for the individual concerned and not because the principles behind token economies or positive reinforcement don’t work – If in doubt just remember the expression ‘money makes the world go round?’ That’s only because token economies work!!

Token Economies

Money makes the world go round!!
Money makes the world go round!! | Source
Rewards for Kids!: Ready-To-Use Charts and Activities for Positive Parenting
Rewards for Kids!: Ready-To-Use Charts and Activities for Positive Parenting
Great book as it contains both the advice and the necessary materials (pull-out charts, certificates etc.) to help you put this practical information into place straight away.


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    • Rob Winters profile imageAUTHOR

      Rob Winters 

      9 years ago

      Thanks Tgregan,glad you liked it and you are absolutely right,totally flexible and applicable in so many ways and places.

    • Tgregan profile image

      Tom Gregan 

      9 years ago from London

      Absolutely love this blog, transfers so well to so many fields

    • Rob Winters profile imageAUTHOR

      Rob Winters 

      9 years ago

      Thanks for reading and your kind comments mailexpress - glad you like it - thanks for letting me know. You're spot on -that's exactly what we do as adults in our day to day lives - it's so ingrained and taken for granted we don't even see it.

    • mailxpress profile image

      Michelle Cesare 

      9 years ago from New York

      You requested friendship at redgage and I accepted then went to view what you uploaded to redgage and ended up at Hubpages. Pretty cool.

      Anyway, great article and like the way you write your content. The token economy graph is sharp and helps make you content clear. Just like adults with jobs, we work hard to receive our tokens to pay bills and buy stuff.

    • Rob Winters profile imageAUTHOR

      Rob Winters 

      9 years ago

      You're absolutely right about that Ania.You can find positive reinforcement principles and token economies at work in many different places.Indeed there are many factors influencing our behaviour that are easily overlooked/not even noticed by most of us on a day to day basis.Thanks for reading and for your comments.Always appreciated :-)

    • Ania L profile image

      Ania L 

      9 years ago from United Kingdom

      Now I know the name for this system - cool :)

      I guess this is all that motivates most people playing games - you get more points, you gain skills, then you can fight bigger creatures and get better loot :)

      Same here on HubPages - we all work towards better Hubber and Hub scores, don't we? So definitelly it works and it's a great motivator.

    • Rob Winters profile imageAUTHOR

      Rob Winters 

      9 years ago

      I really appreciate your comments flacoinohio.They really do work and as your experienced comments indicate they can have almost limitless adaptability and flexibility as is required by a given situation or learning environment and can be tailored to be as simple or as complex as necessary.Thanks for reading :-)

    • flacoinohio profile image


      9 years ago from Ohio

      I agree, token economies do work, I used to work as a behavioral technician at a school for behaviorally impaired children, we utilized the Motivational Teaching Model coupled with a daily economy on a card. This worked well with every child we worked with. Our card indicated target behaviors as indicated my ISP needs and worked on praising positive behaviors and consequating negative behaviors. Students would have to make up additional "credits" to "earn" their day. The goal for students was to go from having to carry a behavioral card to not carrying one. Each child started the program on level two and worked their way to level three. This worked especially well with youths that have never had praise for making positive decisions.

    • Rob Winters profile imageAUTHOR

      Rob Winters 

      9 years ago

      You're absolutely right Ubani,it's so taken for granted nowadays that the system behind it can seem invisible. Money like any token only has worth because of what we agree it can be exchanged for. An obvious but often overlooked reality.Thank you for your kind comments ubani.

    • ubanichijioke profile image

      Alexander Thandi Ubani 

      9 years ago from Lagos

      You ve made a very vital point. Token economy has become a way of life whereby you work hard to be given money[in form of paper] which in turn guarantees your desired need. Well written and appreciated. Bless you

    • Rob Winters profile imageAUTHOR

      Rob Winters 

      9 years ago

      Thank you very much Robert. I appreciate your careful and attentive reading of my hub,the positive critique and of course, the votes, ty sir :-)

    • profile image


      9 years ago

      Rob, your hub does an excellent job of articulating the rationale and processes that drive a token economy. I thought the flow chart was particularly effective in visualizing the steps in the cycle. Your inference that a disconnect in the effort-reward ratio inhibits the behavior reinforcer is a most critical point. Interesting, useful, thumbs up!!! Regards, Robert


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