Lab-4 Incentives Economics Laboratory ppt

Economics Terms

1. LAB-4
(ECONOMIC) INCENTIVES
DEEPAK SINGHANIA
HS 151
27-08-2024

2. WHAT ARE INCENTIVES?
HTTPS://WWW.YOUTUBE.COM/WATCH?V=U3Z0RXUMMXC

3. DIFFERENT TYPES OF INCENTIVES
•INTRINSIC INCENTIVES
•PERSONAL FULFILMENT, MOTIVATION, SHAME, ETC. THAT DOESN’T REQUIRE AN OUTSIDE
REWARD
•EXTRINSIC INCENTIVES –MATERIAL REWARD
•TAX, SUBSDIES, TAX REBATES, FINES, ETC.
•FINANCIAL INCENTIVES (E.G. COMMISSION OF A SALESPERSON)

4. CAN YOU RECALL ANY INCENTIVE
(MONETARY / NON-MONETARY)
THAT PUSHED YOU TO DO OR NOT
DO SOMETHING?
What incentivized you to go for a B.Tech.
program?

5. INCENTIVES IN THE REAL WORLD
HTTPS://WWW.YOUTUBE.COM/WATCH?V=VQK7VZJY6HQ

6. WHAT INCENTIVES HAVE I CREATED IN THIS CLASS?
•HOW DO I GET YOU TO SPEAK UP?
•GRADES BASED?
•SIMPLE QUESTIONS?
•INTRINSIC MOTIVATION?
•WHAT COULD HAVE BEEN DIFFERENT TO MOTIVATE LEARNING, IN GENERAL?

7. GPCB EXAMPLE: TRUTH-TELLING IN THIRD-PARTY AUDITS.
ESTHER DUFLO, MICHAEL GREENSTONE, ROHINI PANDE, AND NICHOLAS RYAN
How do you think the incentives would work
and the emissions would look like?
-Auditors may have incentives to distort or
falsify their reporting.
-Moreover, if auditors don’t report the
truth, no reason for the parties being
regulated to comply, since information
gap to punish violators.

8. GPCB EXAMPLE: TRUTH-TELLING IN THIRD-PARTY AUDITS.
ESTHER DUFLO, MICHAEL GREENSTONE, ROHINI PANDE, AND NICHOLAS RYAN
What other scenario would you expect this kind of
cheating? Solution, for something like this?

9. GPCB EXAMPLE: TRUTH-TELLING IN THIRD-PARTY AUDITS.
ESTHER DUFLO, MICHAEL GREENSTONE, ROHINI PANDE, AND NICHOLAS RYAN

11. DO INCENTIVES ALWAYS WORK?
LET’S LOOK AT THIS ARGUMENT USING POTTY
TRAINING
HTTPS://WWW.YOUTUBE.COM/WATCH?V=W2HHIWBZ0NS
Can you think of examples where individuals have found ways to bypass incentives?

12. UNINTENDED CONSEQUENCES OF INCENTIVES:
THE COBRA EFFECT
•THE COBRA EFFECT
•EXTENSION OF COBRA EFFECT
•COBRA EFFECT AND THE ENVIRONMENT

13. SOME MORE QUESTIONS ON INCENTIVES

14. HOW DO YOU REDUCE ABSENCE OF FRONTLINE
WORKERS?
•HOW CAN YOU REDUCE ABSENCE OF FRONTLINE WORKERS, LIKE TEACHERS DOCTORS?
•WILL WEBCAM, OR SIGNATURE HELP
•WHAT ABOUT GPS TRACKING?
•WHY DO YOU THINK SOME PUBLIC/ADMIN DATA ARE OF POOR QUALITY?

15. OTHER EXAMPLES OF PERVERSE INCENTIVES
https://www.youtube.com/watch?v=FdiQl7urd2w

16. LET’S THINK OF THE BANKING SYSTEM:
•WHAT DO YOU THINK WILL HAPPEN IF THE
INCENTIVES OF BANK OFFICERS ARE DESIGNED
AROUND HOW MANY LOANS THEY GIVE OUT?
•THE 2007-08 FINANCIAL CRISIS

17. SOME MORE EXAMPLES
•HOW DO YOU INCENTIVISE POOR HOUSEHOLDS/PARENTS TO SEND THEIR CHILDREN TO
SCHOOL?
oFREE SCHOOL?
oMIDDAY MEALS?
oINCREASE PENALTY IN THE CHILD LABOUR MARKET?
•INCENTIVE FOR PUBLISHING. WHAT DO YOU THINK WOULD HAPPEN?
•WHAT DO YOU THINK WOULD HAPPEN IF AGENCIES ARE INCENTIVIZED TO RESCUE CHILDREN
BEING MISTREATED BY THEIR PARENTS?
oMRS. CHATTERJEE VS NORWAY

18. ROLE OF TECHNOLOGY
(HTTPS://WWW.POVERTYACTIONLAB.ORG/BLOG/11 -17-20/INCENTIVIZING-PUBLIC-SECTOR-EMPLOYEES-
ROLE-DIGITAL-TECHNOLOGY-ENHANCING-CARROT-AND)
•PROVIDING MONETARY INCENTIVES CAN BE EXPENSIVE
AND/OR POLITICALLY DIFFICULT TO IMPLEMENT
•NON-FINANCIAL INCENTIVES:
•FAVORABLE JOB POSTINGSBASED ON PRIOR PERFORMANCE
•AN EXTRINSIC REWARD SUCH ASGOLD STARSBASED ON PERFORMANCE
•DIGITIZATION HAS THE POTENTIAL TO ENHANCE THE WAY PUBLIC SECTOR EMPLOYEES’
PERFORMANCE IS MONITORED.
•BIOMETRIC MONITORING
•DIGITIZATION HAS THE POTENTIAL TO TRANSFORM THE WAY MONETARY INCENTIVES ARE
DELIVERED
•MGNREGA –BIOMETRIC PAYMENT (KARTHIK MURALIDHARAN)
•GPS AND PHONE-BASED MONITORING, AFGHANISTAN PHONE BASED
PAYMENTS