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It’s All About Incentives
By Will | August 12, 2007
I am reading this book, called “Discover Your Inner Economist” by Tyler Cowen. I like Tyler’s easy to read style. One of my degrees in in Economics, and I can say that I think I would have enjoyed him as a professor. I like the book and highly recommend it.
What is the book about? Incentives
“Incentives” is a word that comes up a lot when working in anything that interacts with humans. That includes designing a new high tech business model, or anything that means trying to get humans to do something.
When I am asked about a new high tech idea or any initiative that is trying to incite a change in a group of people– some of the first questions I ask are about incentives… Why would anyone do that? If the people buy what you are selling or change their behavior in the way you want – what are they getting?
Personal recognition, wealth, personal satisfaction?
Will they be getting something that they will value more than the cost (perhaps money or just time) of what you are trying to convince them to do? This is a key question whenever you are looking at new concepts and ideas. Ideas like “the wisdom of the crowd” are successful when incentives are taken into account. Also, it is important to know what the population you are targeting values. You can’t just assume that everyone values the same incentives the same way.
Incentives, be sure to take them into account whenever you are analyzing something new that you want the world to appreciate.
Topics: Books |
