Financial Incentives Are Weaker Than Social Incentives but Very Important Anyway

Link: https://slatestarcodex.com/2019/10/28/financial-incentives-are-weaker-than-social-incentives-but-very-important-anyway/

NYT: Economic Incentives Don't Always Do What We Want Them To (h/t MR). For the first time in history, the title actually understates the article, which argues that incentives can be surprisingly useless:

Economists have somehow managed to hide in plain sight an enormously consequential finding from their research: Financial incentives are nowhere near as powerful as they are usually assumed to be.

The article starts with some surprising facts. Increased taxes on the rich don't make rich people work much less. Salary caps on athletes don't decrease athletic performance. Increased welfare doesn't make poor people work less. Decreased job opportunities in one area rarely cause people to move elsewhere.

Then it presents a neat chart showing that most people believe others would respond to an incentive, but deny responding to that incentive themselves. For example, 60% of people say a Medicaid program with no work requirement would prevent many people from seeking work, but only 10% of people say they themselves would stop seeking work with such a program.