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Incentives seem to have huge explanatory value wherever you look, don’t they. I’d like to add a classic Warren Buffet quote into the mix: “Show me the incentive
by darkteflon 6y ago
Incentives seem to have huge explanatory value wherever you look, don’t they. I’d like to add a classic Warren Buffet quote into the mix: “Show me the incentive and I'll show you the outcome.”
Does anyone have any views on what constitutes canonical reading on incentives? Some of the classic game theory works? Would love to hear opinions on this.
- N1H1L 6y agoIncentives in my opinion leads to Goodhart's law [1]. In fact, I will go a step further - most incentives are chosen by well meaning people. There is neither malice nor incompetence going on. What happens is that every incentive can be perverted, and will be perverted over time. Over time, then that incentive, that was once chosen with good intentions, becomes perverse. [1]https://en.wikipedia.org/wiki/Goodhart%27s_law https://en.wikipedia.org/wiki/Goodhart%27s_law
- bumby 6y agoIncompetence may be too strong of a word but I think there can be a lack of thinking about second and third order effects when the “measure becomes the target”.
- rstuart4133 6y agoI've never heard of Goodhart's law. To save others clicking on the link, it's: > When a measure becomes a target, it ceases to be a good measure. In my experience, it might actually be a useful approximation of reality.