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LSDefine
Simple English definitions for legal terms
disincentive
Read a random definition: Form 10-Q
A quick definition of disincentive:
A disincentive is something that makes people not want to do something. Laws can create disincentives by punishing people who do certain things. For example, if a law says that people who lie about their company's finances will go to jail, that is a disincentive for companies to lie about their finances. Sometimes, when a law creates a reward for doing something, it also creates a disincentive for doing the opposite. For example, if a law says that people who tell the truth about illegal activity will not get in trouble, that is an incentive for people to tell the truth, but it is also a disincentive for people to keep quiet about illegal activity.
A more thorough explanation:
A disincentive is something that discourages people from doing something. Laws often create disincentives through penalties, liability, and taxes. For example, the possibility of being sued for securities fraud is a disincentive for companies to lie to the public about their finances.
Disincentives can also be unintentional. For example, if a company offers a small bonus for employees who work overtime, it may unintentionally create a disincentive for employees to take breaks or work efficiently during regular hours.
Creating an incentive can also create a disincentive. For example, a law that protects whistleblowers who report illegal activity creates an incentive for people to report wrongdoing, but it also creates a disincentive for people to participate in illegal activity in the first place.