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Economics Truths

December 9th, 2004 · No Comments

Atanu Dey discusses two truths in his inimitable style:

– Incentives Matter: Given the right incentives, people who are bound to the Wheel of Becoming, who have not yet gone across, behave accordingly. If you want them to be good, then reward them for good behavior and they will behave well. If you want them to stop bad behavior, then give them negative reinforcement and they will reduce their bad behavior. The former is called the carrot approach and the latter is called the stick approach. That’s about the sum of it: carrots and sticks.

– Markets Work: Seemingly enlightened behavior emerges from apparent individual selfish actions.

Tags: Deeshaa (Rural Development)

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