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Incentives matter from "summary" of Freakonomics by Steven D. Levitt
The basic idea of economics is that people respond to incentives. If an incentive is changed -- say, a new tax is levied or a subsidy is enacted -- people's behavior will change. Economists are particularly adept at recognizing incentives, even when the incentives are not immediately obvious. Consider a simple example. A child is playing in the park, and his father offers him $5 to come home. The child, who was reluctant to leave the park, now has a new incentive to come home. The father has changed the child's behavior by altering his incentives. This concept applies to all aspects of life, not just parenting. In the world of business, for instance, companies use incentives to motivate their employees. Salespeople ...
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