Token economy refers to a a behavior-modification technique; a social learning behavior modification system in which tokens, which can be exchanged for valued objects or privileges, are awarded for displaying desirable or appropriate behaviors. It is an institution based use of operant conditioning to change the behavior of mental patients by selective positive reinforcement or reward; a form of contingency management in which a client/patient who performs desired activities earns chips or tokens that can later be exchanged for tangible benefits.

Other /More definition:
token economy refers to the social learning behavior modification system in which individuals earn items they can exchange for desired rewards by displaying appropriate behaviors.

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