“Never, ever, think about something else when you should be thinking about the power of incentives.”
Charlie Munger, The Psychology of Human Misjudgment (1995) · Harvard Law School talk, on incentive-caused bias · read it
Kept as the first question to ask when behaviour makes no sense. Munger's examples were a courier firm paying by the hour and a salesman who believed his own pitch. Before explaining people as foolish, ask what they are paid to do.
incentivespsychologydecisionsIncentives drive behaviourIncentive-caused biasThe principal-agent problem