Quotes About Incentives

Institutions that do not recognize that their officers' incentives are not consistent with the goals of the institution will necessarily be corrupted in the long run.

With a market capitalization of $5 billion as of writing, the most popular crypto-collateralized stablecoin is DAI, created by MakerDAO9 and and backed by ETH and other crypto assets. It is soft pegged with economic mechanisms that incentivize supply and demand to drive the price to $1.

Rewarding user behavior with increases in supply (inflationary rewards) has become a common practice to encourage actions such as supplying liquidity or using a particular platform. Consequently, many users engage in yield farming, taking actions to seek the highest possible rewards.

We will look at two different categories of incentives: (1) staked incentives, which apply to a balance of tokens custodied in a smart contract; and (2) direct incentives, which apply to users within the system who do not have a custodied balance.

Frequently, Development will take responsibility for responding to changes in the market, deploying features and changes into production as quickly as possible. IT Operations will take responsibility for providing customers with IT service that is stable, reliable, and secure, making it difficult or even impossible for anyone to introduce production changes that could jeopardize production. Configured this way, Development and IT Operations have diametrically opposed goals and incentives.

The key issue in economics is not aligning incentives with some putative public good but aligning knowledge with power. Business investments have both a financial and an epistemic yield. Capitalism catalytically joins the two. Capitalist economies grow because they award wealth to its creators, who have already proved that they can increase it. Their tests yield knowledge because they are falsifiable; they can be exposed as wrong. Businesses are subject to failure.

If you punish a child for being naughty, and reward him for being good, he will do right merely for the sake of the reward; and when he goes out into the world and finds that goodness is not always rewarded, nor wickedness always punished, he will grow into a man who only thinks about how he may get on in the world, and does right or wrong according as he finds advantage to himself.

A slave lacks incentives; for him it is better to work slowly and badly, since his effort benefits only the master, but free people work hard to save and get ahead,, that is their incentive.

Enterprise zones have succeeded in attracting needed capital to our urban poverty centers. Businesses and investors that wouldn't otherwise give these blighted areas a second glance react to the incentives and invest.

We can attract new businesses and jobs in fast-growing industries through tax incentives, incubators, zoning tools and CUNY partnerships.

Government should create the environment and incentives to stimulate investment in sustainable innovation, take away barriers, and accelerate adoption, even in turbulent economic times.

Profits are part of the mechanism by which society decides what it wants to see produced.

See, if you look at the drug war from a purely economic point of view, the role of the government is to protect the drug cartel. That's literally true.

So I disagree with the followers of Marx and and those of Adam Smith: the reason free markets work is because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or incentives for skill. The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can.

is paid according to some metrics that do not necessarily reflect the health of his company; these he can manipulate, hide risks, get the bonus, then retire

We saw that bureaucrats (whether in government or large corporations) live in a system of rewards based on narratives

Things designed by people without skin in the game tend to grow in complication (before their final collapse).

a system that doesn't have a mechanism of skin in the game, with a buildup of imbalances, will eventually blow up and self-repair that way. If it survives.

the notion of incentives as limited to financial gain cannot otherwise explain the very existence of an economics academia that promotes the idea of self-interest.

In general, skin in the game comes with conflict of interest.

Under the right market structure, a collection of idiots produces a well-functioning market.

the reason free markets work is because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or "incentives" for skill.

a system that doesn't have a mechanism of skin in the game, with a buildup of imbalances, will eventually blow up and self-repair that way.

It is not just bailouts: government interference in general tends to remove skin in the game.