Economics Day 3 Notes: Incentives and Disincentives
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Ex perverse incentive
Cheating
How to make sure incentive structures are effective?
Check them, communicate with the people
Ex of disincentives
ISR, ticket, go to bed early, grounded
Ex of incentives
Money, candy, recognition, food
Perverse incentive
Motivates something completely different
Disincentives
Motivation to not do something
Why do incentive structures sometimes fail?
People aren't motivated by it, figure out a way to beat the system, preverse incentives
Incentive
Something that motivates a person to do something
Why are incentives and disincentives effective?
They provide us with a benefit or cost