Incentives

EconomicsBehavioral PsychologyMotivation

Incentives are rewards or penalties that influence behavior and decision-making.

Introduction

Incentives are rewards or penalties that influence behavior and decision-making.

Core Concepts

  1. Positive Incentives: Rewards for desired behavior.
  2. Negative Incentives: Penalties for undesired behavior.
  3. Perverse Incentives: Misaligned rewards leading to unintended consequences.

Applications

  • Business strategy for motivating employees.
  • Policy-making to encourage sustainable behavior.

Related Resources

  • Book: "Freakonomics" by Steven Levitt and Stephen Dubner.
  • Tools: Incentive design frameworks.

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