“Show me the incentive, and I’ll show you the outcome.” — Charlie Munger
“Never, ever, think about something else when you should be thinking about the power of incentives.” — Charlie Munger
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” — Adam Smith, The Wealth of Nations
= 誘因 = anything that encourages a person (or organization) to do something.
Incentives are the most fundamental concept in Decision Making.
People respond to incentives like Pavlov’s dogs, and they are more likely to act in their own self-interest, even if it contradicts their moral values.