“Show me the incentive, and I will show you the outcome.” -Charlie Munger
“Incentives: the most powerful force in the world. When the incentives are crazy, the behavior is crazy. People can be lead to justify and defend nearly anything.” -Morgan Housel, book Same As Ever: Timeless Lessons on Risk, Opportunity and Living a Good Life
“Incentives matter…People respond to incentives, not to mandates or regulations.” -Gary Becker
Before you “follow the money” as Deep Throat advised Bob Woodward in All The President’s Men, you should first, follow the incentive. You’ll then get to the money.
Nations, communities, companies, organizations and individuals, whether they are aware of it or not, are ruled by their incentives.
If you want to change the outcome, change the incentive.
P.S. – This FS article.
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