Incentives: The Hidden Forces That Shape Behavior

One of my favorite cases about the power of incentives is the Federal Express case. The heart and soul of the integrity of the system is that all the packages have to be shifted rapidly in one central location each night. And the system has no integrity if the whole shift can't be done fast. And Federal Express had one hell of a time getting the th... See more

Incentives are the strongest force in the world. They explain why good people do awful things, why smart people do stupid things, and why ordinary people do amazing things. Nearly everyone underestimates how much their own beliefs and actions are influenced by their incentives, many of which are designed to fulfill someone else’s goals.

Skinner’s three key insights — immediate rewards work better than delayed, unpredictable rewards work better than fixed, and conditioned rewards work better than primary — were found to also apply to humans, and in the 20th Century would be used by businesses to shape consumer behavior. From Frequent Flyer loyalty points to mystery toys in McDonald... See more