Incentives Can Boost or Undermine Social Good, Reshaping Public Policy
Social preferences like altruism and intrinsic motivation play a crucial role in government decisions. Economic incentives can either work with or against these social preferences. Researchers studied how to design the best incentives for people to contribute to public goods. They found that a smart planner would adjust incentives based on whether social preferences and economic incentives complement or substitute each other. This understanding can lead to more effective public policies.