Scientific Definition
Quarterly bonuses create end-of-quarter behavior changes.
Plain-English Definition
Quarterly bonuses create end-of-quarter behavior changes.
Feynman Explanation
Trading desks rediscover discipline on the 28th of every quarter.
Core Principle
Quarterly bonuses create end-of-quarter behavior changes.
Mechanisms
Pending editorial review.
Quarterly bonuses create end-of-quarter behavior changes.
Pending editorial review.
Pending editorial review.
Cadence of measurement distorts cadence of behavior.
Pending editorial review.
Pending editorial review.
Inputs (Triggers)
Pending editorial review.
Outputs (Behaviors)
Pending editorial review.
Behavioral Signature
Trading desks rediscover discipline on the 28th of every quarter.
Examples
- Window-dressing portfolios for reporting periods.
- Cadence of measurement distorts cadence of behavior.
Pending editorial review.
Famous Experiments
Pending editorial review.
Design Principles
- Continuous performance evaluation. Random snapshot audits.
Measurement Approaches
Pending editorial review.
Evidence
Pending editorial review.
Pending editorial review.
The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Continuous performance evaluation. Random snapshot audits.
Pending editorial review.
Pending editorial review.
Interactive Mini Network
Click any neighbor to re-center the graph and follow the threads of connection.
Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
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Issuers pay raters who compete for the highest ratings.
Quarterly earnings drive quarterly behavior.
Percentage-of-AUM fees reward gathering assets regardless of net performance.
Originators paid on volume, not on default rates.
Originators paid on volume, not on default rates, fueled the subprime collapse.
EPS-targeted comp incentivizes buybacks even when reinvestment yields more.
Candidates dependent on large donors become structurally responsive to donor priorities over voter priorities.
Discount framing nudges people to buy things they wouldn't otherwise want.
Productivity targets compress visits, raising misdiagnosis and burnout.