Nudge How incentives work (and why most backfire)
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Nov 6, 2023 Discover the unintended consequences of incentives and how they can lead to negative behaviors. Learn about examples like the window tax in 17th century England and poorly thought-out government incentives. Explore the impact of incentives on consumer behavior, using examples like airline miles and Blockbuster's failure. Reflect on the downfall of Blockbuster and the importance of building better incentives. Understand the effects of incentives on behavior, from comparing taxi drivers' pay structures to discussing fines for late daycare pick-ups.
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The Fossil Smashers
- 19th-century paleontologists in China incentivized peasants with rewards per fossil fragment.
- Peasants smashed fossils into smaller pieces to maximize rewards, decreasing scientific value.
The Window Tax
- A 17th-century window tax, aimed at the wealthy, led people to block their windows.
- This tax backfired, impacting architecture and public health, illustrating how incentives can have unintended consequences.
The Rat Tails
- French colonial Vietnam incentivized rat killings by paying for tails, leading to tailless rats and rat farms.
- This demonstrates how easily incentives can be gamed.