This concept's worked great so far in a Pathfinder game I've been running.
I allow the PC's to spend Bennies for a wide variety of things and one of those things is to add in NPC's into my world. How this happens and where the NPC's are is dependent on the information i've been given.
I had a player spend 2 Bennies in the first session to make 2 of the guards that were in charge of protecting this post cataclysmic war city, Hobgoblins. And he specifically said they were the only 2 Hobgoblins in this whole city of refugees.
So far they are probably the #2 and #3 most popular NPC's in the game. #1 is held by a Gnome Engineer/Chef.
I took the concept of the Devils Bergen from Blades in The Dark ( Thank you Chad
!) And said in Session Zero that the concept would work both ways. If i offer it and ANYONE takes it, something will happen to the current scene, Likewise, if my players wanted to add something to the game, whether that be an NPC, some Legend, Monster Fact, tradition of their people, or what have you, I as the GM could also take the Devils Bargain from my players.
I chose to do this for 2 reasons, the first one was to get my players to be more creative. As much as i love my group and friends, some of them are as creative as a Ham Sandwich, on white bread, with Mayo, and a side of milk to wash it down.
This gets boring fast. I think, though, the issue is they have, as Dan has put it, Battered Gamer Syndrome Light. Or i guess rather they have Battered Creativity Syndrome. A few of the other GM's in our group were always REALLY restrictive with their games and what we could or could not do with our characters based on the GM's perspective of them. So i think the idea of really adding to the world they're gaming in is just an instant Slap in the face.
However, i am happy to say that it does seem to be working. The aforementioned sandwich has gotten a bag of chips added to it now, which doesn't sound like much, but when that translates into my game being requested to be run either longer than 6 hours or Weekly, i'll count it as a win!
The Second reason is I wanted a way to reward the PC's for telling me what they're interested in with out them knowing. It's sometimes hard to really stay interested in what you said you wanted to do, back about 8 months ago. Or maybe we've just hit a point where you dont want to hunt your father down, you just want to have a girls day at a hot spring. I leave my worlds pretty sand boxy because of past games that were destroyed in minutes because i over planned everything.
However, some people really dont know how to handle a game like that, SO to help them out, in my game i have Bennies. If the players are delving through a dungeon or traveling in the wilderness, aside from just listening to what their conversations are about, i also allow them to use the Bennies to influence whats happening in the moment. It could be as little as the next town has a really well known bath house, or as wild as a red dragon in the next room.
Now thats not to say that if a dragon doesnt "fit" in the next room, it might be something similar. Like Dan, i dont just drop random strings in my games that lead nowhere. Every creature, location, encounter, and environment tells a little bit about what this areas all about. So they might give me a Bennie for a Dragon in the next room, but it might be a wyrmling or a Mechanical Dragon some Kobolds rigged up to scare intruders.
This also reinforces the Devils Bargain. A few rooms into the dungeon nothings happened and one player starts mouthing off about Mimics, well well well, i just so happen to have a Bargain for you sir, 1 "free" Bennie to your small pile there... also the front door now wants to eat you instead of let you leave.... so does that stool..