Incentives and Behaviour: Lessons From Economics

Have you ever wondered why folks do what they do?, what motivates them to make certain choices ? How can we influence their behaviour for better outcomes etc...

If this is of interest, then we must learn more about incentives. Incentives are rewards or punishments that affect behaviour of individuals or groups.

They can be used to encourage or discourage certain behaviour, such as eating healthy, studying hard working effeciently, or protecting the environment.

Incentives are important for altering human behaviour especially in healthcare, education and public policy.

However designing them is often a challenging task. It requires deep understanding of human behaviour and their responses.

There is a field of study dedicated to solving and designing better incentives. It is called Behaviour Economics.

Below are few key insights that can be learnt from this field of study in order to understand how we could design better incentives to help folks alter their behaviour for better outcomes.

Key Insights

Incentives must be powerful enough to derive change and offer value, that can bring about significant impact in the individual's life as well as the environment around him/her.

Change must be constant, and must be powerful enough to create a positive impact and not have negative consequences.

A positive and desirable transformation must assist in changing and transforming others creating a ripple effect in and around himself/herself.

Thus incentives which can alter the society for better outcomes are best incentives for an individual too.

Some of the most common forms of incentives include financial incentives, social incentives and moral incentives.

Tokens and Incentives

Digital tokens like bitcoin, hive and others have opened a new gateway to incentivize human behaviour in a more democratic way than ever before. These tokens are a powerful means by which we can transform society in a more meaningful manner. Thus it is important for us to understand human behaviour and it's nuances before undertaking the time consuming affair of starting a crypto project, as it will have a ripple effect on trust, autonomy and human behaviour.

Good Day

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