Incentives

How do you visualize incentives?

Incentive structures are they systemic ways in which we provide positive and negative feedback to the participants in that system to get them to do the things that make the system work.

Personal Incentive Structures

Our brains are controlled by these incentives, and study after study has shown that even the most willful of us are powerless against them.

Our day to day lives and habits are controlled by the incentive structures we put around us. Temptations aren't avoided with willpower, but with willful avoidance. In order to make any change you want to make, you must first change your environment so the desired change is rewarded and alternatives are discouraged or ignored.

Perverse Incentives

Perverse incentives occur when these systems unintentionally encourage the opposite of their desired outcome. The most egregious examples of waste, fraud and abuse in history come when the rewards for doing wrong outweigh the rewards for doing good. This is further complicated by our brain's tendency to favor immediate rewards over long-term consequences, increasing the saliency of the temptation to cheat.

Corruption is Just Bad Incentives

Creating a better society can only be done by changing the incentive structures of our economy and government.

Justice is only achieved through elaborate checks and balances to balance the strong incentives to cheat that all parties have.

Power tends to corrupt; absolute power corrupts absolutely. --Lord Acton

Politicians almost never begin their careers with the intention of becoming corrupt. They all believe they are doing what is best for their country. But as soon as they become a part of a system that incentivizes fundraising and media presence over lawmaking, it is inevitable that they will serve the interests of donors over voters.

Podcast hosts and other content creators don't usually start out spreading misinformation and grift. But the economics mean that those who do can get lucrative deals with the Daily Wire and PragerU, or sponsorships from various grifters selling bogus supplements, MLMs, poor investments, and doomsday prepper gear.

Making moral arguments against corruption, and hoping that everyone will resist these temptations, is a recipe for failure and frustration. The only solution is to address the incentive structures that lead to corruption.

The advantage of this approach is that it is non-partisan. Systemic changes that improve the balance of power and remove perverse incentives should have very broad support among voters, and opposed only by entrenched corrupt power structures. In a democracy, as long as there are candidates willing to run on these broadly popular positions, they can always defeat the entrenched powers. There is no need for revolution, only persuasion.

Incentives and Motivation in Video

Need an incentive to watch more YouTube videos? If learning about incentives doesn't incentivize you then maybe something random will.

What are Incentives?

Societal Expectations and Inner Desires: The Complex Dynamics of Motivation

Honest Bob and the Factory to Dealer Incentives - Soy Bomb