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[ Question ]

What are examples of the opposite of perverse incentives?

by JohnGreer
18th Jun 2021
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World Optimization
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What are examples of the opposite of perverse incentives?
6antanaclasis
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3Dagon
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1Measure
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antanaclasis

Jun 18, 2021

60

I’d say a lot of domains have reasonably-aligned incentives a lot of the time, but that’s a boring non-answer. For a specific example, there’s the classic case of how whenever I go to the grocery store, I’m presented with a panoply of cheap, good quality foodstuffs available for me to purchase. The incentives along the chain from production -> store -> me are reasonably well-aligned.

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[-]JohnGreer4y20

Yes, I agree that a grocery store is a great example. I suppose I'm looking for examples where people recognized a problem, changed the incentives, and then it fixed/improved things.

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Dagon

Jun 18, 2021

30

https://en.wikipedia.org/wiki/Pigovian_tax is likely a good example - if implemented well, the incentive effect scales precisely with remediating the harm caused.

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[-]JohnGreer4y20

Yes, I think Pigovian taxes are really interesting and useful. I suppose then I'm looking for examples of privately implemented Pigovian taxes that fixed a problem successfully.

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[-]Measure4y10

Typo in the title.

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[-]habryka4y20

I edited it

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[-]JohnGreer4y10

Thanks

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I think a lot about the importance of incentives. There are numerous historical examples of perverse incentives but what are some examples of times where people got the incentives right?