I am teaching "social preferences" to my (econ) students. One of my first slides has this anecdote from Dawes and Thaler (1988):
In the rural areas around Ithaca it is common for farmers to put some fresh produce on the table by the road. There is a cash box on the table, and customers are expected to put money in the box in return for the vegetables they take. The box has just a small slit, so money can only be put in, not taken out. Also, the box is attached to the table, so no one can (easily) make off with the money. We think that the farmers have just about the right model of human nature. They feel that enough people will volunteer to pay for the fresh corn to make it worthwhile to put it out there. The farmers also know that if it were easy enough to take the money, someone would do so.
I can buy the idea that this is probably true in academic research, which, as you said, is a strong link problem, but this only means lots of waste is probably worth it.
Most of the world isn’t a strong link problem. I go to my job because they pay me. If they didn’t pay me, I’d do something that I personally find more rewarding. If I got paid the same no matter what I did, well, I’d probably make a bunch of music, exercise all the time and try to sell my ideas to other people. This is probably true of most people outside academia: They work for pay and would not do the work if they weren’t being paid. Does this make us “morons” or “cowards?”
Here’s the rub:
> I want to find the people who are willing to do the right thing even when it’s inconvenient, and hand them some money so they can keep doing that.
You want to find people that are doing what YOU think is the right thing, and hand them money so that they will do what YOU think is right.
So you already do believe in incentives, because you’re using them too! Clearly, they work. The people who don’t share your values have made it clear they think what you’re doing is wrong and evil. If they could, I bet they’d stop you. But fortunately for the world, they can’t, because you have the ability to create enough financial incentive to make it worthwhile for people to join you.
I think what you’re doing is the same mistake you put at the top: yeah, some people use incentives to produce bad outcomes, but not you. How is this different than imagining others are more motivated by money than you are?
Maybe you should consider that the people saying how they’d behave in hypothetical situations are actually deluding themselves, and that the reality is their descriptions of other people as being motivated by profit and incentive is more accurate than their own glowing self assessment. After all, do you really think 63% of people actually give blood for free? Or are they just saying that because we all like to imagine ourselves as more virtuous than we truly are? I’ll bet actual blood drives get much closer to 32% participation than 66% participation, because our assessment of others as being motivated by rewards is generally more accurate than our noble assessment of ourselves.
The Valve statement about hiring well is fascinating. Having spent my working career in the tech industry at firms of every stage and size from garage startup to hundred year-old elephant, I can share my lived experience:
- Every company says that it is absolutely committed to hiring well
- Every company is terrible at it
- Everybody who works in tech outside of HR agrees with this
- Everybody who works in tech outside of HR also agrees that HR are the worst people in any company, that they love the box, and that they would love to put and keep everybody else in the box.
- Also, never go to HR to solve a problem you have with the company. HR's job is to protect the company from you, not the other way around.
Part of the problem is that HR does not understand anything that anybody else does, or what skills and behaviors are important in those jobs, so they can only define roles and hire people to fill them on the basis of quantifiable qualifications, e.g. "a BSc degree, knowledge of C++, and six years experience with Floogle". It is a standing joke in our industry that HR routinely asks for six years experience in a technology or product created two years ago. (I personally know one guy who was turned down for a job working with a technology that he literally invented because he had insufficient experience in it.)
This dream world of HR people, where job applications can be evaluated by algorithms, has been thoroughly enshittified by companies such as Indeed and LinkedIn who have industrialized the reduction of resumés to beige boxes and the consequent commodification of employees.
I firmly predict that we are no more than two years away from a world where, at least in tech, the overwhelming majority of job applications are written by one AI and evaluated by another one.
(Despite the many good things in the post:) You are strawmanning incentive theory.
Firstly, money is probably one of the weakest incentives. It is boring, unsexy and frowned upon as a motivation. It might be upstream from many good things, but you aren't spending your day conscious of this fact. Try looking at other incentives, like convenience, time, reputation and self-image. For example, a better version of the blood drive experiment would present one group with an ambulance taking blood at the spot, while another would see a truck advertising a blood drive half a mile away. Surely a mile is not too long a walk for such a prosocial undertaking? I'm convinced that the numbers would come out very different, though.
Secondly, positive and negative incentives are not symmetric, no matter what economists believe is rational. I am unlikely swayed in favor of doing something by a $20 reward, but quite likely to be detracted from it by a $20 cost, particularly if this cost lets me feel or look like a mark. The same applies to inconveniences (see the mile walk above). I don't think others are much different in this regard.
Thirdly, not every goal can be achieved by enthusiasts resistant to any sort of outside incentives. It works with art, science and programming much of the time, though even here you can lose a lot of enthusiasts by putting hurdles in their paths. I don't think it's working with policing very well -- at least here in the US, the evaporation of cops from cities into suburbs is a long-time trend that helps make American urban cores what they are. It works with war to some extent (volunteer divisions often produce the best results), but clearly is not sufficient, or else no country would need conscription. Even in science, I suspect that most enthusiastic researchers are being pulled into teaching by their ears, and some would happily exchange half their teaching load for half their pay. Not to mention refereeing, in which I have found the slightest changes in incentive to move me a long way. (I know you don't think very highly of refereeing, but it works well in those fields that have a good preprint culture: it keeps the upsides while making most of the downsides go away.)
- not only are there some fascinations that are financially remunerative (I'll round that to "socially useful", which is of course its own debate) and some that aren't
- but of the things that ~nobody is fascinated by, some are socially useful (cleaning bathrooms?) and some aren't
(I think that you're arguing that incentives distort some of the things in the upper-right in bad ways, and commenters are arguing that there's a lot in the lower-right that still needs incentivizing)
Are you familiar with Dostoyevsky's "Notes From Underground?" It's way shorter than his other books. I think you would especially appreciate part 1. Quotable quote:
"…the whole work of man really seems to consist in nothing but proving to himself every minute that he is a man and not a piano-key!"
> Witness the infinite energy that a teenager will expend on figuring out whether their crush likes them back, or the weekends people will sink into pruning their rose bushes, or the hundreds of hours that fans will pour into making cosplay costumes. Behold this 170 page guide on how to identify locations in Mongolia so you can get better at GeoGuessr, a game where you see one random screenshot from Google Street View and you have to figure out where you are.
And those examples show the problem with relying on intrinsic motivation. What people are intrinsically motivated to do tends to be very different from what would actually be useful.
The thesis of this seems that we should try and support people who do the prosocial thing regardless of external incentives instead of working hard to align incentives.
Its interesting that you don’t include self image and purpose as things that can be used to incentivize people.
You used many examples from elite companies and institutions such as valve and universities that lots of people want to work at, vs wells fargo which is a lower status and paying job. Wells fargo (and many other companies) can’t just hire internally moral people. They need to make sure their incentives are right.
Wells fargo’s problems arise when the incentives of the whole institution is to maximize profits in the short term.
I find it difficult to conceive of a man who *wouldn't* trade letters of recommendation for sexual favours. I mean who wouldn't recommend their girlfriend for a job? As an adolescent I would have crawled over miles of broken glass to get laid, so I'm pretty sure that I could have managed to write a nice letter.
And most men trade their entire lives and more than half the money they'll ever make for sexual favours at some point. Paid in advance without even having good reason to believe their counter-party will actually fulfil their end of the deal!
And I personally love computer programming and maths, and do lots of both in my spare time. But I really hate working in open plan offices and I am not usually very interested in other people's boring business problems. And yet I find myself doing those two things, over and over again. (I do try to keep it to a minimum though, and never having traded most of my lifetime income for sexual favours really helps with that.)
Most of the awful open plan offices are full of people who don't really like programming, and are doing it full time all the time, year in, year out, apparently only for the money.
Also $15 to go through a medical procedure? Of course not. Offer me $10,000 and see what I do.
Isn't the elephant in the room here that you're talking about a ~1-5% elite of self-motivated, art-for-art's-sake doers and intrinsically motivated people?
Like if you gave a $50k annual UBI to people, and this somehow didn't cause inflation, what percent of the population would you truthfully estimate is going to flourish and increase their contribution to society, and what percent would you estimate are going to spend all their time on Tik Tok and VR porn, or whatever equivalents?
Because I'm betting on 5% / 95% respectively. You need carrots and sticks for people who aren't self-motivated and doing jobs they love. Sure, we're relatively bad at it, *particularly* from any sort of "human flourishing" perspective. But the alternative is just consigning the majority of the population to being net consumers in a welfare state funded by the much rarer doers and self-motivated elite.
Even if you don't personally think 5 / 95 is the right split, I'd bet any reasonable estimate has the right side of the slash as the majority by far.
You said you want people who "give a hoot." Those are the people for whom the work itself is an incentive. Of course, that incentive becomes devalued if you're on the brink of starving. In that case, suddenly the incentive of money becomes more important.
Likewise, if someone really doesn't care much about the work but only took it for the paycheck, no amount of incentives will make them love the work enough to do it well. Not even money can magically make a boring or degrading job into a good one. But the job still needs to be done. So you're forced to offer imperfect incentives and hope for the best.
That's the real secret to incentives. There's no one thing that will always work.
Externally motivated people produce adequacy; internally motivated people produce excellence. Someone who's there for the check, or to fulfill social obligations, or because their religion said so, is going to do well enough to not face penalties, up to the point where they feel further efforts are pointless. A carrot might produce a burst of labor, but the baseline is adequacy. Any attempts at changing this will just result in the person taking further shortcuts back to adequacy. Excellence takes people who are willing to put in that extra work intrinsically, AND an environment that supports them.
There's the famous business trueism that A people hire A people but B people hire C people.
I guess the problem with the "find the right people and empower them" is that it's unfalsifiable: if a group of right people failed spectacularly, we would deem the wrong people with hindsight. Maybe we can run society or at least an organization by having right people feel out other right people in ways that cannot be systematized, but it only takes one bad apple to ruin the batch.
Great post -- it also shows the patchwork limitations of modern psychology, and why the research is such garbage. No matter how exceptions can be found, founders of theories will inherently still insist broad application of their pet whatever.
People do what they need to do because of the values they have. Those values create the social structures that they operate under, which then turns into a self-reinforcing paradigm. That doesn't mean there's not exceptional behavior that you can get through some version of coercion. But values (and the stage of development someone is at) drives their EMERGENT behavior.
I am teaching "social preferences" to my (econ) students. One of my first slides has this anecdote from Dawes and Thaler (1988):
In the rural areas around Ithaca it is common for farmers to put some fresh produce on the table by the road. There is a cash box on the table, and customers are expected to put money in the box in return for the vegetables they take. The box has just a small slit, so money can only be put in, not taken out. Also, the box is attached to the table, so no one can (easily) make off with the money. We think that the farmers have just about the right model of human nature. They feel that enough people will volunteer to pay for the fresh corn to make it worthwhile to put it out there. The farmers also know that if it were easy enough to take the money, someone would do so.
I can buy the idea that this is probably true in academic research, which, as you said, is a strong link problem, but this only means lots of waste is probably worth it.
Most of the world isn’t a strong link problem. I go to my job because they pay me. If they didn’t pay me, I’d do something that I personally find more rewarding. If I got paid the same no matter what I did, well, I’d probably make a bunch of music, exercise all the time and try to sell my ideas to other people. This is probably true of most people outside academia: They work for pay and would not do the work if they weren’t being paid. Does this make us “morons” or “cowards?”
Here’s the rub:
> I want to find the people who are willing to do the right thing even when it’s inconvenient, and hand them some money so they can keep doing that.
You want to find people that are doing what YOU think is the right thing, and hand them money so that they will do what YOU think is right.
So you already do believe in incentives, because you’re using them too! Clearly, they work. The people who don’t share your values have made it clear they think what you’re doing is wrong and evil. If they could, I bet they’d stop you. But fortunately for the world, they can’t, because you have the ability to create enough financial incentive to make it worthwhile for people to join you.
I think what you’re doing is the same mistake you put at the top: yeah, some people use incentives to produce bad outcomes, but not you. How is this different than imagining others are more motivated by money than you are?
Maybe you should consider that the people saying how they’d behave in hypothetical situations are actually deluding themselves, and that the reality is their descriptions of other people as being motivated by profit and incentive is more accurate than their own glowing self assessment. After all, do you really think 63% of people actually give blood for free? Or are they just saying that because we all like to imagine ourselves as more virtuous than we truly are? I’ll bet actual blood drives get much closer to 32% participation than 66% participation, because our assessment of others as being motivated by rewards is generally more accurate than our noble assessment of ourselves.
The Valve statement about hiring well is fascinating. Having spent my working career in the tech industry at firms of every stage and size from garage startup to hundred year-old elephant, I can share my lived experience:
- Every company says that it is absolutely committed to hiring well
- Every company is terrible at it
- Everybody who works in tech outside of HR agrees with this
- Everybody who works in tech outside of HR also agrees that HR are the worst people in any company, that they love the box, and that they would love to put and keep everybody else in the box.
- Also, never go to HR to solve a problem you have with the company. HR's job is to protect the company from you, not the other way around.
Part of the problem is that HR does not understand anything that anybody else does, or what skills and behaviors are important in those jobs, so they can only define roles and hire people to fill them on the basis of quantifiable qualifications, e.g. "a BSc degree, knowledge of C++, and six years experience with Floogle". It is a standing joke in our industry that HR routinely asks for six years experience in a technology or product created two years ago. (I personally know one guy who was turned down for a job working with a technology that he literally invented because he had insufficient experience in it.)
This dream world of HR people, where job applications can be evaluated by algorithms, has been thoroughly enshittified by companies such as Indeed and LinkedIn who have industrialized the reduction of resumés to beige boxes and the consequent commodification of employees.
I firmly predict that we are no more than two years away from a world where, at least in tech, the overwhelming majority of job applications are written by one AI and evaluated by another one.
(Despite the many good things in the post:) You are strawmanning incentive theory.
Firstly, money is probably one of the weakest incentives. It is boring, unsexy and frowned upon as a motivation. It might be upstream from many good things, but you aren't spending your day conscious of this fact. Try looking at other incentives, like convenience, time, reputation and self-image. For example, a better version of the blood drive experiment would present one group with an ambulance taking blood at the spot, while another would see a truck advertising a blood drive half a mile away. Surely a mile is not too long a walk for such a prosocial undertaking? I'm convinced that the numbers would come out very different, though.
Secondly, positive and negative incentives are not symmetric, no matter what economists believe is rational. I am unlikely swayed in favor of doing something by a $20 reward, but quite likely to be detracted from it by a $20 cost, particularly if this cost lets me feel or look like a mark. The same applies to inconveniences (see the mile walk above). I don't think others are much different in this regard.
Thirdly, not every goal can be achieved by enthusiasts resistant to any sort of outside incentives. It works with art, science and programming much of the time, though even here you can lose a lot of enthusiasts by putting hurdles in their paths. I don't think it's working with policing very well -- at least here in the US, the evaporation of cops from cities into suburbs is a long-time trend that helps make American urban cores what they are. It works with war to some extent (volunteer divisions often produce the best results), but clearly is not sufficient, or else no country would need conscription. Even in science, I suspect that most enthusiastic researchers are being pulled into teaching by their ears, and some would happily exchange half their teaching load for half their pay. Not to mention refereeing, in which I have found the slightest changes in incentive to move me a long way. (I know you don't think very highly of refereeing, but it works well in those fields that have a good preprint culture: it keeps the upsides while making most of the downsides go away.)
This is absolutely brilliant. I started quoting it to my friends but I ended up quoting about half of it.
This makes me realize that the "lottery of fascinations" is actually a 2x2
https://slatestarcodex.com/2013/06/30/the-lottery-of-fascinations/
- not only are there some fascinations that are financially remunerative (I'll round that to "socially useful", which is of course its own debate) and some that aren't
- but of the things that ~nobody is fascinated by, some are socially useful (cleaning bathrooms?) and some aren't
(I think that you're arguing that incentives distort some of the things in the upper-right in bad ways, and commenters are arguing that there's a lot in the lower-right that still needs incentivizing)
Are you familiar with Dostoyevsky's "Notes From Underground?" It's way shorter than his other books. I think you would especially appreciate part 1. Quotable quote:
"…the whole work of man really seems to consist in nothing but proving to himself every minute that he is a man and not a piano-key!"
https://gutenberg.org/ebooks/600
Or if you just want to look at my favorite chapter:
https://www.gutenberg.org/files/600/600-h/600-h.htm#chap08
> Witness the infinite energy that a teenager will expend on figuring out whether their crush likes them back, or the weekends people will sink into pruning their rose bushes, or the hundreds of hours that fans will pour into making cosplay costumes. Behold this 170 page guide on how to identify locations in Mongolia so you can get better at GeoGuessr, a game where you see one random screenshot from Google Street View and you have to figure out where you are.
And those examples show the problem with relying on intrinsic motivation. What people are intrinsically motivated to do tends to be very different from what would actually be useful.
The thesis of this seems that we should try and support people who do the prosocial thing regardless of external incentives instead of working hard to align incentives.
Its interesting that you don’t include self image and purpose as things that can be used to incentivize people.
You used many examples from elite companies and institutions such as valve and universities that lots of people want to work at, vs wells fargo which is a lower status and paying job. Wells fargo (and many other companies) can’t just hire internally moral people. They need to make sure their incentives are right.
Wells fargo’s problems arise when the incentives of the whole institution is to maximize profits in the short term.
I find it difficult to conceive of a man who *wouldn't* trade letters of recommendation for sexual favours. I mean who wouldn't recommend their girlfriend for a job? As an adolescent I would have crawled over miles of broken glass to get laid, so I'm pretty sure that I could have managed to write a nice letter.
And most men trade their entire lives and more than half the money they'll ever make for sexual favours at some point. Paid in advance without even having good reason to believe their counter-party will actually fulfil their end of the deal!
And I personally love computer programming and maths, and do lots of both in my spare time. But I really hate working in open plan offices and I am not usually very interested in other people's boring business problems. And yet I find myself doing those two things, over and over again. (I do try to keep it to a minimum though, and never having traded most of my lifetime income for sexual favours really helps with that.)
Most of the awful open plan offices are full of people who don't really like programming, and are doing it full time all the time, year in, year out, apparently only for the money.
Also $15 to go through a medical procedure? Of course not. Offer me $10,000 and see what I do.
Isn't the elephant in the room here that you're talking about a ~1-5% elite of self-motivated, art-for-art's-sake doers and intrinsically motivated people?
Like if you gave a $50k annual UBI to people, and this somehow didn't cause inflation, what percent of the population would you truthfully estimate is going to flourish and increase their contribution to society, and what percent would you estimate are going to spend all their time on Tik Tok and VR porn, or whatever equivalents?
Because I'm betting on 5% / 95% respectively. You need carrots and sticks for people who aren't self-motivated and doing jobs they love. Sure, we're relatively bad at it, *particularly* from any sort of "human flourishing" perspective. But the alternative is just consigning the majority of the population to being net consumers in a welfare state funded by the much rarer doers and self-motivated elite.
Even if you don't personally think 5 / 95 is the right split, I'd bet any reasonable estimate has the right side of the slash as the majority by far.
Four times as many students in Wisconsin take the ACT compared to SAT. This is the test college-bound high schoolers take in Wisconsin.
You said you want people who "give a hoot." Those are the people for whom the work itself is an incentive. Of course, that incentive becomes devalued if you're on the brink of starving. In that case, suddenly the incentive of money becomes more important.
Likewise, if someone really doesn't care much about the work but only took it for the paycheck, no amount of incentives will make them love the work enough to do it well. Not even money can magically make a boring or degrading job into a good one. But the job still needs to be done. So you're forced to offer imperfect incentives and hope for the best.
That's the real secret to incentives. There's no one thing that will always work.
Externally motivated people produce adequacy; internally motivated people produce excellence. Someone who's there for the check, or to fulfill social obligations, or because their religion said so, is going to do well enough to not face penalties, up to the point where they feel further efforts are pointless. A carrot might produce a burst of labor, but the baseline is adequacy. Any attempts at changing this will just result in the person taking further shortcuts back to adequacy. Excellence takes people who are willing to put in that extra work intrinsically, AND an environment that supports them.
There's the famous business trueism that A people hire A people but B people hire C people.
I guess the problem with the "find the right people and empower them" is that it's unfalsifiable: if a group of right people failed spectacularly, we would deem the wrong people with hindsight. Maybe we can run society or at least an organization by having right people feel out other right people in ways that cannot be systematized, but it only takes one bad apple to ruin the batch.
Great post -- it also shows the patchwork limitations of modern psychology, and why the research is such garbage. No matter how exceptions can be found, founders of theories will inherently still insist broad application of their pet whatever.
People do what they need to do because of the values they have. Those values create the social structures that they operate under, which then turns into a self-reinforcing paradigm. That doesn't mean there's not exceptional behavior that you can get through some version of coercion. But values (and the stage of development someone is at) drives their EMERGENT behavior.
Longer than a comment -- but start by understanding v-Memes. https://empathy.guru/so-whats-a-v-meme/