Economic incentives do not always lead to desired outcomes from "summary" of Misbehaving by Richard H Thaler
Thaler discusses how the traditional economic theory assumes that people always respond predictably to incentives. However, in reality, individuals often do not act in the way that economic models predict. This discrepancy between theory and reality is due to the fact that people are not always rational decision-makers. One example Thaler gives is the case of tax incentives for energy conservation. Despite offering financial rewards for reducing energy consumption, many people do not take advantage of these incentives. This is because individuals may not be aware of the incentives available to them, or they may not fully understand how to take advantage of them. In another example, Thaler disc...
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