- Resources, from K:
- From C
- Behavior Analysis -
- Used to help treat autism and improve workforce safety
- “The best way to understand people is to focus on their behavior — the things they do and say.”
- Ivan Pavlov coined “behavior conditional reflexes” through his famous dog-feeding experiments revealed that one could pair neutral stimuli with desired stimuli to create a particular outcome of observable behavior, in this case a dog creating saliva.
- Insight from Jay — perhaps Incentive Design spans levels of influence: individual, team, organization, society (city, state, country), and global. Do the same types of designs and reactions affect each of these? Do the same theoretical and methodological underpinnings create results at different levels of scale?
Here are potential examples of broken incentives to articulate and expand
Illustrates how Institutional Review Boards stifle innovation. Designed to decrease risk rather than balance risk with potential reward?
This was linked in original doc with the line “Do QALY cost analysis for all things, not just medicine.” Not clear to me its relationship to Incentive Design.
Examine why the Nobel committee thought his work was so important. Flesh out how much more potential exists to build upon it — think more systemically than just “nudge” in preferred direction.
The Opportunity to Transform Healthcare
My goal is to create a 1-page case on the opportunity to transform healthcare through better understood incentives. Once written it will be linked from the Healthcare section of the Vision page.
Rough sketch of example:
- Articulate some of the key problems in healthcare today. e.g. how institutional review boards stifle innovation or how risk aversion slows doctors from adopting potentially valuable innovations.
- Show some ways that behavioral economics (or other adjacent fields) have helped with these problems. Examine other literature.
- Illustrate some of the open questions and limitations — show the important questions that further study of incentive design may help answer.
Suggested approach — review articles below, reach out to James and a couple of other doctors. Draft and iterate.
- Commonwealth Fund article
- Using Behavioral Economics to Design Physician Incentives That Deliver High-Value Care
- Table 2 in particular has good discussion of behavioral economics principles that can be applied in health care
- One in particular is to use social comparison mechanisms. Potentially powerful, but also contradictory to Jana Gallus’ findings in the paper “When peer comparison information harms physician well-being”
- APPLYING INSIGHTS FROM BEHAVIORAL ECONOMICS TO POLICY DESIGN
- Changing health behaviors using financial incentives
Changing health behaviors using financial incentives: a review from behavioral economics - BMC Public Health
Background Incentives are central to economics and are used across the public and private sectors to influence behavior. Recent interest has been shown in using financial incentives to promote desirable health behaviors and discourage unhealthy ones. Main text If we are going to use incentive schemes to influence health behaviors, then it is important that we give them the best chance of working. Behavioral economics integrates insights from psychology with the laws of economics and provides a number of robust psychological phenomena that help to better explain human behavior. Individuals’ decisions in relation to incentives may be shaped by more subtle features – such as loss aversion, overweighting of small probabilities, hyperbolic discounting, increasing payoffs, reference points – many of which have been identified through research in behavioral economics. If incentives are shown to be a useful strategy to influence health behavior, a wider discussion will need to be had about the ethical dimensions of incentives before their wider implementation in different health programmes. Conclusions Policy makers across the world are increasingly taking note of lessons from behavioral economics and this paper explores how key principles could help public health practitioners design effective interventions both in relation to incentive designs and more widely.
Vaughn Tan is the author of an excellent book, The Uncertainty Mindset, which explores the practices of the most innovative teams in high end cuisine and what lessons other R&D teams can glean from them.
- Areas of focus to develop ID as a discipline. Theoretical distinctiveness from existing fields is crucial if it is in fact separate from them.
- [Fundamentally important] Theoretical foundations of ID. What are the general underlying mechanisms by which incentives work? These will likely be informed by theory from cognitive neuroscience, experimental psychology, sociology.
- [Fundamentally important] Normative ethics of ID. How should we think about when we should (or should not) use incentives? Essential to develop an ID ethics alongside ID theory, methodologies, and deployment expertise — don’t wait for the tools to be in market before thinking about ethics of use.
- Methodologies for research and analysis. What are the tools for operationalizing ID theory for empirical research? These will likely be borrowed from economics (contract theory), sociology (social policy analysis), social psychology.
- Content areas for deployment. How is the application of ID the same or different in different deployment contexts (e.g., a small nonprofit org vs a large for-profit org vs a society)?
- Another aspect of Incentive Design is that the incentive itself affects the system in which it operates. This distinguishes ID and its study from many of the related adjacent fields of psychology, economics, sociology.
- Some similarity to complexity science, though here the incentive changes the system because humans learn and adapt, unlike particles in an atmospheric system.
- Means that one must also execute restraint to implement incentives effectively. Campbell’s Law and Goodhart’s Law both illustrate in different domains the propensity for a measure (a type of incentive) to perturb the system.
- Also means that ID is an inherently evolving and dynamic process — not something that can be done once and left alone. How does this affect its study, both for theoretical and methodological development?
- Creating a new discipline is a political exercise in addition to developing the theory and methods.
- Expect resistance or critiques from existing fields who will expect that ID should be explored from within their frameworks.
- Will need high-reputation academics to participate and lead
- Creating tenure lines with PhDs will require decades to mature
- Copenhagen Consensus
- https://copenhagenconsensus.com/sites/default/files/cp-populationfinished_0.pdf - did not see connection here or through author Philip Martin
- https://copenhagenconsensus.com/scorecard-humanity/research seems interesting in that it takes a historical, economic, and quantitative view of many of the areas that ID hopes to address (climate, health, education). However, I don’t see connection to ID.
- https://copenhagenconsensus.com/copenhagen-consensus-iii/how-spend-75-billion-make-world-better-place has some interest, but not directly related. Maybe some overlap in people who worked on this and who would be interested in ID?
- e.g. “Need to keep education unaffordable for tax reasons, more than 50% of students need aid or the charity loses its status.” — Is there a perverse incentive for educational institutions?
- NSM: my understanding is this that universities have tax exempt status because they are primarily for educational purposes, and thus this does not apply. “Charitable purposes” would be an alternative reason to be awarded 501(c)(3) status, but should not affect their incentives.
- https://www.aau.edu/sites/default/files/AAU Files/Key Issues/Taxation %26 Finance/Tax-Exempt-Status-of-Universities-FINAL.pdf
- Brookings argues that tax benefits for education aren’t effective https://www.brookings.edu/articles/the-tax-benefits-for-education-dont-increase-education/
The original document, which is private, is located here: https://docs.google.com/document/d/10xS7tG1ABTKxmZVLgTFHQN5A_liCUTx6H1rqnmKKmh8/edit
Cedric Chin is the author of Commoncog, an excellent exploration of business expertise — what it is and how we arrive at it.
Commoncog is about business and career decision making in a world of constant change. Updates weekly.
Digest of conversation with blogger on business strategy and practice.
- Incentives are hugely important in business, perhaps even more pervasive than Munger’s quote indicates. Great businesspeople have predilection to understand what others want and how to factor that into their strategy and agreements.
- 🚩 See Tim Ferris podcast about Marvel Studios formation with David Maisel. https://tim.blog/2023/06/07/david-maisel-marvel/
- Reference how Warren Buffet got all CEOs at Berkshire Hathaway to contribute free cash flow to (BH). Required BH stock purchase and tied bonus to their business’ cash input.
- 🚩 See Amazon’s executive compensation practices in Harvard Law Review speech
- GitCoin crypto investors are putting new theoretical and mathematical approaches into practice
- 🚩 See https://arxiv.org/abs/1809.06421 for quadratic funding for public goods
- 🚩 Vaugh Tan is doing work, both academic and popular, about how to deal with uncertainty — may be related
- Book: Uncertainty Mindset argues that expected value is a poor concept for how to quantify risk. Need an alternative mindset
- Also runs workshops (”Unpacking Boris”), internet salons, community of practitioners
Best way to get an idea out is a community of practice. Academics are more likely to study something that is working.
- Singapore does an excellent job of incentive design.
- 🚩 Liberalism Disavowed articulates many of their approaches. Create, watch, iterate. There will always be unintended consequences of any policy. Embrace this, learn and adjust.
- Public housing (HDB) is great example: initially taken from public housing agency left behind by the British, and repurposed to incentivize population to want to defend country by giving them skin in the game (around the same time National Service was introduced). Has grown to help government build tolerance by housing diverse communities together and to nudge family planning by providing incentives if you marry early and if you reside near your respective parents. CPF built on same “pillar” provides social safety net. As a result, HDB is now a load bearing institution.
- 🚩 Santa Fe Institute has a novel approach (”complexity theory”) with academics that may be helpful. Josh Wolfe, Bill Gurley, Michael Mauboussin.
- 🚩 See also Goodhart’s Law Isn’t as Useful as You Might Think about why avoiding Goodhart’s Law (that “when a measure becomes a target, it ceases to be a good measure.”) requires you to give people the space to improve the system rather than just to set a target.
This is a digest. Unedited, private, notes are available here: https://docs.google.com/document/d/1Ie9pH9izefbCki6eOIxXKAFxSAuNaX1H78RCaxSSq6Q/edit?pli=1#heading=h.o14ez7dwwcpw
- Maastrecht University
- Harry Hummels, Professor of Ethics, Organizations and Society.. https://www.maastrichtuniversity.nl/news/people-economic-chains-fellow-human-beings-values-chains… What has he published? https://scholar.google.com/scholar?hl=en&as_sdt=0%2C5&q=Harry+Hummels&btnG=
- Don’t see much related to incentives. Though ethics and values?
- Staff https://www.maastrichtuniversity.nl/people. Want to read more?
- J Bakens - https://www.maastrichtuniversity.nl/j-bakens - no
- Bammes - possible https://www.maastrichtuniversity.nl/ypm-bammens.
- No - research seems related but not quite on our topic. https://www.maastrichtuniversity.nl/ypm-bammens/research
- Basturk - no - https://www.maastrichtuniversity.nl/n-bastürk/research
- Belderbox - distinguished, but no research info. https://www.maastrichtuniversity.nl/ra-belderbos
- Borghans’ topics seem relevant; not much info though. https://www.maastrichtuniversity.nl/l-borghans
- Bosmans https://www.kristofbosmans.com/
- Paper on Inequality and its stemming from compenstaion or reward may be worth a look
- ⭐ Briker - lots of work in relevant areas. May be interesting to talk with; may have ideas how to proceed or who else to meet.
- Efendic - https://www.maastrichtuniversity.nl/e-efendic/research - psychologist interested in judgment and decision making
- Probably too narrow. https://sites.google.com/site/janosflesch/publications
- ⭐ Festjens - studies behavioral decision making at the intersection of psychology and economics - https://www.maastrichtuniversity.nl/festjens
- Worth reading more: https://www.maastrichtuniversity.nl/festjens/research
- Günter - https://www.maastrichtuniversity.nl/h-günter/research - topics revolving around voice behavior, employee silence, and work team effectiveness
- ⭐ Haesebrouck - knowledge sharing, incentives, budgeting, honesty, telecommuting, contagion, culture control, audit quality - https://www.maastrichtuniversity.nl/k-haesebrouck - research mentions incentive design; she comes from accounting background
- ⭐ https://www.sciencedirect.com/science/article/pii/S0361368221000179
- Jiao - topics seem relevant but insufficient detail to warrant followup. https://www.maastrichtuniversity.nl/p-jiao
- Linde - touches on Nudge…
- Marie - https://www.maastrichtuniversity.nl/o-marie/research - also from LSE
- ⭐ https://cris.maastrichtuniversity.nl/en/publications/homo-econo-delictus-incentives-and-rational-crime. With video: https://maastrichtuniversity.bbvms.com/view/default_videoteam/2933022.html
- Marques dos Santos - team cognition, adaptation and multiteam systems in dynamic environments. - https://www.maastrichtuniversity.nl/c-marques-dos-santos/research
- Research seems in same general direction and might have insights on who to talk with.
- ⭐ Moers - field of expertise is performance measurement and incentives and I am especially interested in the intersection between accounting and labor economics - https://www.maastrichtuniversity.nl/f-moers
- Not much detail, but right on target. Learn more.
- Schils - I analyse questions related to education from an economic perspective. Economists use theoretical models to simplify the world in order to understand mechanisms behind people’s behaviour and develop the right incentives. - https://www.maastrichtuniversity.nl/t-schils
- Focus is too narrow, but may be interested in cause and have ideas on how to pursue.
- Schröder - passionate about interdisciplinary approaches to solving challenges in service environments such as health-care, manufacturing with a service potential on and hospitality environments. - https://www.maastrichtuniversity.nl/gj-odekerken-schröder/research
- Mission-aligned; may have ideas who to talk to.
- Visentin - https://scholar.google.ch/citations?user=MnQTwyoAAAAJ&hl=it. Some overlap. Probably not worth exploring more.
- ⭐ Werner - My main interests lie in behavioral and experimental economics. The goal of my research is to apply insights about behavioral regularities to the design of organizations, markets and public policy. - https://www.maastrichtuniversity.nl/p-werner.
- Seems mission-aligned; probably has good ideas who’s doing work in field
- Publications indicates many on-topic themes: https://www.maastrichtuniversity.nl/p-werner/research
Investors in Need of Social, Ethical, and Environmental Information
Journal of Business Ethics - In this contribution we will briefly discuss the shareholders' need for social, ethical and environmental information and the efforts of corporations to address...
- Compensation and Incentives in Workplace
- Looks like potentially a treatise on the formation of field — fleshed out here:
- Compensation and Incentives In The Workplace
- Other papers that cite this one: https://scholar.google.com/scholar?cites=2286507627369723638&as_sdt=2005&sciodt=0,5&hl=en
- What makes work meaningful and why economists should care about it
- Milena Nikolova - http://www.milena-nikolova.com/ - University of Groningen
- ⭐ F.D. (Femke) Cnossen, PhD- https://www.rug.nl/staff/f.d.cnossen/?lang=en - Postdoc, based in Groningen
- Choosing the discount size in the software industry: How to incentivise the salesforce - https://www.sciencedirect.com/science/article/pii/S0019850123000093
- Bergers, Dominic - https://www.scopus.com/authid/detail.uri?authorId=57221418865
- ⭐ Relational Incentives Theory - https://psycnet.apa.org/record/2021-98409-001
- ⭐ Jana Gallus - http://www.janagallus.com/research - Assoc. Prof.
- Joseph Reiff - https://www.josephreiff.com/ (PhD Student)
- Emir Kamenica - https://faculty.chicagobooth.edu/emir-kamenica
- Alan Fiske - https://en.wikipedia.org/wiki/Alan_Fiske
- Incentive Theory - https://psycnet.apa.org/record/1982-31908-001
- Peter Richard Killeen - https://en.wikipedia.org/wiki/Peter_Richard_Killeen
- ‘You are free to choose . . . are you?’ Organisational punishment as a productivity incentive in the social science literature - https://journals.sagepub.com/doi/abs/10.1177/00187267211007891?journalCode=huma
- Tom McNamara - https://www.rennes-sb.com/faculty/dr-mcnamara-tom/ - prof
- Debra Meloso - https://sites.google.com/view/debrahmeloso - AP, prob too focused.
- Marco Michelotti - https://www.rennes-sb.com/faculty/dr-michelotti-marco/ - - prof
- Petya Puncheva - https://www.rennes-sb.com/faculty/dr-puncheva-petya/ - prof
- Incentives and habit formation
- Heather Royer - https://sites.google.com/site/heathernroyer/
- Mark Stehr - https://www.lebow.drexel.edu/people/markstehr
- Justin Sydnor - https://business.wisc.edu/directory/profile/justin-r-sydnor/
- Sci hub https://sci-hub.se/database
- Downloaded metadata to be able to search; haven’t yet reviewed
- Analysis of Fintech Policy Landscape - Milken Institute