The deliberate design of reward structures to produce specific behaviors.
Incentive Architecture
Most of what I write here is about systems that produced the wrong behavior. Boards that burned heat into empty buildings. Banks that rewarded accounts instead of relationships. Organizations that hit their targets and destroyed their objectives in the process. This Wednesday is different. On May 16, an 18-year-
Incentive Architecture
A bank, a heat subsidy and a group of Israeli daycares have almost nothing in common. Each built a system to change behavior. Each got precisely what it rewarded, and none of them got what they wanted.
Incentive Architecture
Every system produces exactly the behavior it rewards. Not the behavior it intends. Not the behavior it describes in the mission statement. The behavior it rewards. That's the thesis. Three words: behavior follows rewards. This publication is built around that idea — applied to real decisions, real institutions, and