The Freakonomics guys are very good at pointing out that behavior in society is driven by small incentives. Set up a system in which people can donate blood for free, then you're going to get good Samaritans donating blood. Offer $5 for a pint, and you're going to get a slightly different mix of people. The good Samaritans will still be there, but there will be others doing it for the five dollars. (That's cigarette money for the day.)

But if you offer $5000 for a pint of blood, you can be sure that people will come out of the woodwork to donate blood. A whole different batch of people would suddenly show up with blood to give. Problem is, it might be animal blood, or it might be someone else's blood, that they're attempting to pass off as their own. Benevolence is displaced by greed.

Several years ago, Amazon told its customer service folks that their performance evaluations would be based on the number of calls they took in a hour. The result? Customers getting hung up on prematurely.

I doubt anyone would think it's a good idea to offer $5000 per pint of donated blood. But stock traders on Wall Street often have year-end bonuses world several hundreds of thousands of dollars dangled in their faces. Presumably, this is done so they'll perform better at their jobs and make smarter trades.

Up the reward, and (especially) if it's a monetary one, there's a good chance that all you've done is given people an incentive to game the system.