3  Incentive Systems

In the simplest case, you have one agent with multiple incentive forces acting on it. You can draw this out like a free body diagram.

There are some incentives to do any action, and some incentives against doing it. If the incentives to do some action are greater than the incentives against doing it, then the agent will take the action.

Using this framework allows you to create comparisons that were formally not in the same units, ie not apples-to-apples.

In a simple case study, a prospective user of a ridesharing gig app may have a positive financial incentive to do so. They may also have disincentives to do so - taking gigs would decrease the user’s free time, the wear on the user’s car, and registering as a driver can be an onerous process.

If the incentives outweigh the disincentives, the user will take the action. If the disincentives outweigh the incentives, the user will not take the action.

As such, as someone designing a system where you see that the system’s users are not taking the action you want them to take, you can assume that in the best case, the incentives are exactly canceled out by the disincentives, and it is also possble that the disincentives are significantly outweighing the incentives.

However, there is one special incentive that you can think of as always applying. There is a “status-quo-preserving” disincentive acting in opposition to any offered incentive. Equivalently, you can think of this as an “effort” disincentive.