Incentives

Notes

Incentives are often synonymous with "motives". Or rather incentives are the tools by which someone is motivated. Often, incentives are a type of External Motivation, usually in a form of a financial benefit or harm, but not limited to that.

Basically, any type of reward or punishment that is given to an action, whether implicitly or explicitly, can be count as an incentive. For example. a basic incentive could be a 10% tax reduction for every donation you give, or the desire to help your sector in order to make it easier for you to be reelected.

Usually incentives are inwards driven, meaning that they are egoist in nature, referring to personal benefits Self Bias. They turn us into Econs that think it matters of Utility and logical calculations rather than our more human side of values, emotions and norms. They distort the Intention of our actions. Even if we are incentivized to do what's right, we do it only because it benefits us, and not because we see it as an expression of our values Commodification. What we do becomes Instrumental to us.

It gets worse when what we are incentivized to do goes against what's right, which leads to the Shirky Principle, where incentives leads to the survival of inefficient systems.

Additionally, incentives harm Habit formation, because when the incentives stop, so does the reason to continue with the habit.

Sometimes we can assume the cause of someone's actions just by looking at the incentives dictated by the system he works in Systematical Thinking. For example, if the incomes of media companies are dictated by clicks and commercials, we can assume that it incentivizes them to write stories that maximizes clicks and emotional shock rather than provide accurate, relevant information.

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Overview

🔼Topic:: Economics (MOC) 🔼Topic:: Behavioral Psychology (MOC) 🔼Topic:: Motivation (MOC) Origin:: 🔗Link::