People respond to changes in incentives from "summary" of The Economic Naturalist by Robert H. Frank
Incentives play a crucial role in shaping human behavior. When the cost of doing something decreases, people are more likely to do it. Conversely, when the cost of doing something increases, people are less likely to do it. This simple principle underlies a wide range of economic phenomena. Consider the example of a public policy aimed at reducing carbon emissions. By imposing a tax on carbon emissions, the government increases the cost of polluting. As a result, businesses and individuals have a greater incentive to reduce their carbon footprint. They may invest in cleaner technologies, use public transportation more frequently, or simply consume less energy. In another context, think about how people respond to ...
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