How To Understand Psychological Incentives - Uri Gneezy

Uri Gneezy is a behavioural economist, a professor at the University of California and an author who's research focuses on human incentives. Incentives encourage humans to do things. But they're not as straight forward as you might think. They often have unintended and disastrous consequences for our personal lives, businesses and societies. Basically, a bad incentive is worse than no incentive at all. Expect to learn why paying citizens 10p for a rat tail is a bad idea, how fining parents for taking their kids on holiday results in more kids missing school, why the Toyota Prius won because of its strange design, why Peloton's sales went up when they increased the price, why Coke machines have an outdoors thermometer on them and much more... Sponsors: Get 83% discount & 3 months free from Surfshark VPN at https://surfshark.deals/MODERNWISDOM (use code MODERNWISDOM) Get $100 discount on the best water filter on earth from AquaTru at https://bit.ly/drinkwisdom (discount automatically applied) Get 20% discount on all Keto Brainz products at https://ketobrainz.com/modernwisdom (use code: MW20) and follow them on Instagram at https://www.instagram.com/ketobrainz/ Extra Stuff: Buy Mixed Signals - https://amzn.to/40pQ4Tj Get my free Reading List of 100 books to read before you die → https://chriswillx.com/books/ To support me on Patreon (thank you): https://www.patreon.com/modernwisdom #psychology #behaviour #economics - 00:00 Intro 00:25 Explaining Incentives 03:55 Social Dynamics of Signalling 12:15 The Problem with Mixed Signals 17:34 Uber’s Driver Incentive Program 21:02 The Right Way to Encourage Innovation & Punish Failure 28:06 How Peloton Sold More With a Higher Price 32:50 The Mixed Signal of Long-Term Goals & Short-Term Results 38:31 How Incentives Are Helping Prevent Female Genital Mutilation 46:24 Why Fines Are So Bad at Incentivising Behaviour 52:41 How an LA Car Company Used Incentives to Drive Sales 1:02:18 Using Incentives to Find Problems 1:08:14 What Most People Get Wrong About Negotiation 1:13:30 Where to Find Uri - Get access to every episode 10 hours before YouTube by subscribing for free on Spotify - https://spoti.fi/2LSimPn or Apple Podcasts - https://apple.co/2MNqIgw Get my free Reading List of 100 life-changing books here - https://chriswillx.com/books/ - Get in touch in the comments below or head to... Instagram: https://www.instagram.com/chriswillx Twitter: https://www.twitter.com/chriswillx Email: https://chriswillx.com/contact/

Uri GneezyguestChris Williamsonhost

Apr 1, 20231h 14mWatch on YouTube ↗

EPISODE INFO

Released: April 1, 2023
Duration: 1h 14m
Channel: Modern Wisdom
Watch on YouTube: ▶ Open ↗

EPISODE DESCRIPTION

Uri Gneezy is a behavioural economist, a professor at the University of California and an author who's research focuses on human incentives. Incentives encourage humans to do things. But they're not as straight forward as you might think. They often have unintended and disastrous consequences for our personal lives, businesses and societies. Basically, a bad incentive is worse than no incentive at all. Expect to learn why paying citizens 10p for a rat tail is a bad idea, how fining parents for taking their kids on holiday results in more kids missing school, why the Toyota Prius won because of its strange design, why Peloton's sales went up when they increased the price, why Coke machines have an outdoors thermometer on them and much more... Sponsors: Get 83% discount & 3 months free from Surfshark VPN at https://surfshark.deals/MODERNWISDOM (use code MODERNWISDOM) Get $100 discount on the best water filter on earth from AquaTru at https://bit.ly/drinkwisdom (discount automatically applied) Get 20% discount on all Keto Brainz products at https://ketobrainz.com/modernwisdom (use code: MW20) and follow them on Instagram at https://www.instagram.com/ketobrainz/ Extra Stuff: Buy Mixed Signals - https://amzn.to/40pQ4Tj Get my free Reading List of 100 books to read before you die → https://chriswillx.com/books/ To support me on Patreon (thank you): https://www.patreon.com/modernwisdom #psychology #behaviour #economics - 00:00 Intro 00:25 Explaining Incentives 03:55 Social Dynamics of Signalling 12:15 The Problem with Mixed Signals 17:34 Uber’s Driver Incentive Program 21:02 The Right Way to Encourage Innovation & Punish Failure 28:06 How Peloton Sold More With a Higher Price 32:50 The Mixed Signal of Long-Term Goals & Short-Term Results 38:31 How Incentives Are Helping Prevent Female Genital Mutilation 46:24 Why Fines Are So Bad at Incentivising Behaviour 52:41 How an LA Car Company Used Incentives to Drive Sales 1:02:18 Using Incentives to Find Problems 1:08:14 What Most People Get Wrong About Negotiation 1:13:30 Where to Find Uri - Get access to every episode 10 hours before YouTube by subscribing for free on Spotify - https://spoti.fi/2LSimPn or Apple Podcasts - https://apple.co/2MNqIgw Get my free Reading List of 100 life-changing books here - https://chriswillx.com/books/ - Get in touch in the comments below or head to... Instagram: https://www.instagram.com/chriswillx Twitter: https://www.twitter.com/chriswillx Email: https://chriswillx.com/contact/

SPEAKERS

Uri Gneezy
guest
Chris Williamson
host
Narrator
other

EPISODE SUMMARY

In this episode of Modern Wisdom, featuring Uri Gneezy and Chris Williamson, How To Understand Psychological Incentives - Uri Gneezy explores why Incentives Backfire: Understanding Signals, Motivation, And Behavior Change Uri Gneezy explains that incentives are not just about money; they act as signals that shape the stories people tell themselves and others about their actions. He contrasts the overly mechanical economic view (“more pay = better outcomes”) with the overly idealistic psychological view (“people work only for meaning”), arguing that effective incentive design must integrate both. Through examples ranging from daycare fines and doctors’ bonuses to Uber ratings, Peloton pricing, and hybrid cars, he shows how poorly designed incentives can produce the opposite of what was intended. He also illustrates how incentives can be used for good—like reducing female genital mutilation among Maasai girls—when they are aligned with local economic realities and cultural signals.

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