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?
[Question] What are examples of the opposite of perverse incentives?
Typo in the title.
I edited it
Thanks
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.
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.
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.
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.