How Buffett and Munger set incentives:
Everyone has heard: "Show me the incentives -- and I'll show you the outcome"
But what do good incentives actually look like?
Here's the incentive system Buffett and Munger used for GEICO:
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I’m increasingly of the belief that incentive design is the most important problem to work on. Humans are good at overcoming obstacles when they have reason to do so — the worst problems tend to be ones of cooperation, not technological or scientific understanding.
