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The Incentives Lab
Free · 10 lessons · ~25 minutes · No signup

Incentives 101.

The minimum vocabulary you need to read the rest of this site — and the rest of the world. One idea per page, one real example, one quick check, and one interactive practice.

Progress: 0/10
  1. 01
    What is an incentive, really?
    An incentive is anything that makes a behavior more or less likely.
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  2. 02
    Show me the incentive, I'll show you the outcome.
    Whenever behavior surprises you, look at what's being rewarded.
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  3. 03
    Losses hurt about twice as much as gains feel good.
    We are not rational about pain. We're loss-averse — roughly 2:1.
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  4. 04
    When a measure becomes a target, it stops being a good measure.
    Once people optimize for the metric, the metric stops measuring what you cared about.
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  5. 05
    The Principal–Agent Problem.
    Whenever someone acts on your behalf, their interests are not automatically your interests.
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  6. 06
    Perverse incentives: the system rewards the opposite of what it wants.
    A perverse incentive is when the rule, intended to fix a problem, makes it worse.
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  7. 07
    System 1 and System 2.
    Most decisions are fast, automatic, and pattern-matched — not deliberate.
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  8. 08
    Nudges: choice architecture without coercion.
    A nudge changes how options are presented, not what options exist.
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  9. 09
    Extrinsic vs. intrinsic motivation.
    Paying people for something they already loved doing can kill the love.
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  10. 10
    Alignment: making the system want what you want.
    Alignment is the whole game — for people, organizations, markets, and AI.
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After the primer

Get certified in Incentive Intelligence™.

The 12-week Incentives Academy is the deep end — taught by Aaron Bare and Ricardo Rosselló, PhD. Finish 101 and you're ready for it.