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Token Economy Psychology

What is a token economy?

A token economy is a behavior-management system in which targeted behavior is reinforced with tokens (secondary reinforcers) and later exchanged for rewards (primary reinforcers). The method is based on operant conditioning and is widely used in elementary classrooms​1​

A good token economy system has five major components:​2​

  • Tokens – many things can be used as tokens. They are usually physical objects such as tickets or poker chips. But they can also be figurative tokens such as bonus points, stamps, or tally marks. In operant conditioning, a token is a neutral stimulus
  • Target behaviors – the behavior to reinforce
  • Rules – how tokens are earned or lost
  • Backup reward – tangible rewards that a designated number of tokens can exchange for. They are reinforcers that the participants value.
  • Method of exchanging tokens for backup rewards

In a token system, the neutral stimulus (token) can be exchanged for a primary reinforcer (backup reward) such as toys, snacks, money, privileges, or other incentives. The token becomes the secondary reinforcer encouraging the target behavior. Good behavior is reinforced by repeatedly presenting tokens with the desired behaviors.

girl does laundry with mom with a to do list

Types of token economy

In token economies, tokens can be added or removed. Different variations of token economies are possible in the real world due to this flexibility​3​.

These are the different forms of exchangeable token systems.


In a reinforcement system, tokens are given when target behavior appears. Using positive reinforcement, this form of token system is commonly used to encourage social behavior.

Response cost

In a response cost system, tokens are taken away when an inappropriate behavior appears. The token loss is the cost of that behavior. A response cost system is generally used to suppress challenging behavior.

Researchers find that when reinforcement and response cost are combined, the target behavior increases more than when reinforcement is used alone.

However, despite the benefits, there are two major drawbacks.

First, teachers are more negative with the students when response cost is used in the classroom​4​.

Second, a management system solely based on punishment is less likely to encourage positive behaviors in participants​5​.

Lottery system

Lottery-based systems add another element to the exchange period.

This type of token system rewards the target behavior with tokens, and at the end of the reward period, a lottery determines who gets the backup reward. 

By choosing to exchange fewer tokens or tickets, a lottery system can minimize the number of back-up reinforcers needed.

Individual vs whole class

The advantage of using whole class or group-oriented reward systems is that it’s easier to track the tokens and give out rewards while reducing undesirable behavior​6​.

Level systems

A level system is a variation of the token method.

Each level corresponds to a different degree of participant behavior. Based on participants’ behavior, they move from one level to another, resulting in reinforcement.

Examples of token economy

Behavior modification using token economies has been popular for decades. This operant conditioning strategy replaces punitive disciplinary measures that were once the main method of teaching children how to behave.

Token economy examples include:

  • Gold stars on a chore checklist to earn allowance at home
  • Check marks on a behavior chart to earn privileges at home
  • Clips on a clip chart in an elementary classroom
  • Token tickets won at the carnival to exchange for toys

Even though the token economy is a useful tool in many situations, they raise concerns and questions among researchers.

Let’s explore the pros and cons of using discipline strategies based on this basic principle.



One significant advantage of token use is that it works in a variety of behaviors and settings. It has been successfully used across a wide range of settings and target responses, including education​7​, residential psychiatric hospitals, group homes for rehabilitation​8​, vocational settings​9​, and college classes​10​.

Easy implementation

It is easy to implement with minimal effort. The design and implementation of token programs are relatively straightforward.

Fast result

The use of positive reinforcement to change a child’s behavior is well tested. In the short term, it is an effective way to obtain quick results.


Various parties can collaborate on implementation. For example, teachers may not have reinforcing contingencies in the classroom for children with severe disruptive behavior. Parents or guardians can be involved to dispense the consequences at home for behavior occurring in school​11​.


Not effective for some groups

There are some populations that do not respond well or at all to the procedure. Older children or chronic psychiatric patients, for example, are generally not affected by it​12​.

Unintentionally incentivize the wrong behavior

It may incentivize unethical behavior such as stealing tokens or sabotage by participants. Trustees for the New York City schools removed the reward system in the 1830s since cunning behavior rather than meritorious behavior was rewarded.


Participants become dependent on it. Withdrawal of tokens may result in decreased desirable behavior or increased bad behavior.

Ethical concerns

Philosophical opposition to token reinforcement as it constitutes bribery (reinforcement) or blackmail (response cost)​13​

Issues with ethical and legal concerns to patient rights when their rights of mental patients are withheld and used as reinforcers​14​.

Undermining intrinsic motivation

In educational settings token economy raises the question of whether it undermines intrinsic motivation as a result of the overjustification effect.

How to use it most effectively to improve your kid’s behavior

Children who are not responsive to tokens usually fail to respond to the set of contingencies that are standard across all kids. Improvements in the system can be made by taking the following measures.

  • Value increase – Reward more tokens or exchange tokens for larger rewards.
  • Reinforcer sampling – By allowing kids to see or experience a portion of the backup reinforcers without contingency, they will be more likely to want to earn tokens to buy it​15​.
  • Backup selection – Allow participants to choose their preferred items for which they are willing to engage in the target behavior to earn.
  • Increase the frequency of reward delivery during the early phase of the implementation so that participants can be quickly reinforced.


  1. 1.
    Kazdin AE. Principles of Operant Conditioning. The Token Economy. Published online 1977:1-18. doi:10.1007/978-1-4613-4121-5_1
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    McLaughlin TF, Williams RL. The Token Economy. Handbook of Behavior Therapy in Education. Published online 1988:469-487. doi:10.1007/978-1-4613-0905-5_18
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    McGoey KE, DuPaul GJ. Token reinforcement and response cost procedures: Reducing the disruptive behavior of preschool children with attention-deficit/hyperactivity disorder. School Psychology Quarterly. Published online 2000:330-343. doi:10.1037/h0088790
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    Doll C, McLaughlin TF, Barretto A. The token economy: A recent review and evaluation. International Journal of basic and applied science. 2013;2(1):131-149.
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    O’Leary KD, Drabman R. Token reinforcement programs in the classroom: A review. Psychological Bulletin. Published online 1971:379-398. doi:10.1037/h0031311
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    Phillips EL. Achievement Place: token reinforcement procedures in a home-style rehabilitation setting for “pre-delinquent” boys1. J Appl Behav Anal. Published online 1968:213-223. doi:10.1901/jaba.1968.1-213
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    Fox DK, Hopkins BL, Anger WK. THE LONG-TERM EFFECTS OF A TOKEN ECONOMY ON SAFETY PERFORMANCE IN OPEN-PIT MINING. Journal of Applied Behavior Analysis. Published online September 1987:215-224. doi:10.1901/jaba.1987.20-215
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    Boniecki KA, Moore S. Breaking the Silence: Using a Token Economy to Reinforce Classroom Participation. Teaching of Psychology. Published online July 2003:224-227. doi:10.1207/s15328023top3003_05
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    Bailey JS, Wolf MM, Phillips EL. Home-based reinforcement and the modification of pre-delinquents’ classroom behavior1. J Appl Behav Anal. Published online 1970:223-233. doi:10.1901/jaba.1970.3-223
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    Kazdin AE. The token economy: a decade later. J Appl Behav Anal. Published online 1982:431-445. doi:10.1901/jaba.1982.15-431
  13. 13.
    Kohn A. Punished by Rewards: The Trouble with Gold Stars. In: Incentive Plans, A’s, Praise, and Other Bribes. ; 1999.
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    Homer AL, Peterson L. Differential reinforcement of other behavior: A preferred response elimination procedure. Behavior Therapy. Published online September 1980:449-471. doi:10.1016/s0005-7894(80)80063-3
  15. 15.
    Ayllon T, Azrin NH. REINFORCER SAMPLING: A TECHNIQUE FOR INCREASING THE BEHAVIOR OF MENTAL PATIENTS1. Journal of Applied Behavior Analysis. Published online March 1968:13-20. doi:10.1901/jaba.1968.1-13


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