A Study in Incentives (Freakonomics-Style)

For those of you who don't know, Freakonomics is a book wherein the author studies human behavior through the variables of incentives affecting human behavior. He then analyses those incentives by using regression analysis or something. It's essentially something I dont know how to do. At any rate, this post is me discussing various incentives that exist in our world. It'll be somewhat incomplete though, as I have no data to analyze, nor the means to analyze it even if I had it.

The first example is rather trivial, but it was the first I thought of and led to me thinking about greater topics. A short time ago, I was watching a TV show dedicated to various "experts" finding bigfoot. Through the course of the show they supposedly witnessed howls of bigfoot, found tracks of bigfoot, talked to witnesses in the area... and then the show ended. It was a lot of foreplay with no sex. Thinking about it however, I realized that the show's creators had an incentive not to actually find bigfoot despite the show's name. They find bigfoot, and the show's over. Instead, they gradually increase the suspense over and over again to get people to tune in. If they finally found him, all of these self-proclaimed bigfoot expert's careers would be over.

That sort of incentive also applies to theoretical physics, though in a different manner. Individually, there is a huge incentive for scientists to discover the theory of everything. Their name becomes a household one like Einstein, they win a Nobel prize, etc. etc. For the scientific field as a whole however, there actually exists an incentive for them to not discover everything. If they do, their careers are essentially over. One might say that those scientists could transition into utilizing their discoveries into practical applications, but that is the role of engineers not theoretical physicists. There is an interesting conflict of incentives here, between individualistic and group-based.

The same thing can apply to cancer research too. Again there is a huge individual incentive to cure cancer, but to the industry at large it might not be. Cancer research is actually a huge industry, and once it's cured the entire thing would go away.

The same rationale could be applied to a myriad of different things. There is an incentive for auto manufacturers to never produce a car that's maintenance-free. Otherwise the demand for new cars would drop, and the entire auto maintenance industry would disappear.

There is an incentive for environmentalists to never let environmental problems go away, otherwise their industry disappears. And yes, there is an industry for it.

This is where my theorizing reaches it's end, for I have no data to analyze to calculate the strengths of these various incentives. It may be that these I listed are trivial, but I think it's interesting enough in that they actually exist despite common beliefs. One would hope that the counter-incentives would be greater then the ones i listed to encourage actual progress.

Also, I highly recommend the book to anyone even vaguely interested.