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incentives

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    Incentive Design Entry #0394

    Why a strong guarantee shifts behaviour on both sides

    A guarantee moves the cost of a bad outcome from one party to another. Both parties then face different prices for care, and both respond.

    Adept
    The hidden part #0394

    A guarantee does not remove the cost of a bad outcome. It reassigns it, and every party whose price of care changed will adjust.

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    Incentive Design Entry #0393

    The reason peer review rewards caution

    A reviewer who wrongly rejects is never identified. A reviewer who wrongly accepts is named in the record, and the two errors are not priced alike.

    Novice
    The hidden part #0393

    The two errors of review are not priced alike. A missed discovery is anonymous and a published mistake is attributable, so caution is the cheaper mistake.

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    Incentive Design Entry #0391

    The reason a subsidy raises the price of the subsidised

    Who receives a payment and who keeps it are separate questions. Where supply cannot expand, the payment is absorbed into the price instead.

    Adept
    The hidden part #0391

    A subsidy is paid to whoever is named and kept by whoever holds the scarce side. Where supply cannot move, the price does.

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