Always Remember Incentives
Ryan | 27 08 2007If you're a first time visitor, you may want to subscribe to our RSS feed, which will keep you up to date with all the latest New School Politics posts. Thanks for visiting!
When considering policy–or anything for that matter–remember how people react to incentives. Assuming “you” are the decision maker:
1. When you bear the costs for someone else’s benefit, you mind the measure of the costs but not the benefits.
2. When someone else bears the costs for your benefit, you mind the measure of the benefits but not the costs.
3. When one person bears the costs of another person’s benefit, you mind neither the measure of the costs nor the benefits.
4. But when you bear the cost and the benefit, you will mind both the cost and the benefit.
Seems simple enough, no? Then why do so many insist of distorting healthcare to mimic numbers 1, 2, and 3 rather than leaving it to 4.
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