April 01, 2023

How To Understand Psychological Incentives - Uri Gneezy - #609

1 hour 14 minutes

Uri Gneezy is a behavioural economist, a professor at the University of California and an author who's research focuses on human incentives.

Incentives encourage humans to do things. But they're not as straight forward as you might think. They often have unintended and disastrous consequences for our personal lives, businesses and societies. Basically, a bad incentive is worse than no incentive at all.

Expect to learn why paying citizens 10p for a rat tail is a bad idea, how fining parents for taking their kids on holiday results in more kids missing school, why the Toyota Prius won because of its strange design, how reframing discounts can rapidly change behaviour, why Peloton's sales went up when they increased the price, why Coke machines have an outdoors thermometer on them and much more...

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Timestamps:

(00:00) Intro

(00:25) Explaining Incentives

(03:55) Social Dynamics of Signalling

(12:15) The Problem with Mixed Signals

(17:34) Uber’s Driver Incentive Program

(21:02) The Right Way to Encourage Innovation & Punish Failure

(28:06) How Peloton Sold More With a Higher Price

(32:50) The Mixed Signal of Long-Term Goals & Short-Term Results

(38:31) How Incentives Are Helping Prevent Female Genital Mutilation

(46:24) Why Fines Are So Bad at Incentivising Behaviour

(52:41) How an LA Car Company Used Incentives to Drive Sales

(1:02:18) Using Incentives to Find Problems

(1:08:14) What Most People Get Wrong About Negotiation

(1:13:30) Where to Find Uri

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By Chris Williamson

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