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Epiphany comments on Open thread, July 29-August 4, 2013 - Less Wrong
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I'm looking for a reading recommendation on the topic of perverse incentives, especially incentives that cause people to do unethical things. Yes, I checked "The Best Textbooks on Every Subject" thread and have recorded all the economics recommendations of interest. However, as interested as I am in reading about economics in general, my specific focus is on perverse incentives, especially ones that cause people to do unethical things. I was wondering if anyone has explored this in depth or happens to know a term for "perverse incentives that cause people to do unethical things", (regardless of whether it's part of economics or some other subject), as I can't seem to find one.
Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management has a fair amount about the limits of incentive plans.
From memory: incentives can work for work that's well-defined and can be done by one person. Otherwise, the result is people gaming the system and not cooperating with each other.
I don't remember whether the book covered something I heard about in the 70s or 80s about a car company which had incentives for teams assembling cars rather than an assembly line.
I was told about a shop owned by partners which had an incentive system for bringing in sales for the shifts the partners worked. The result was that the partners wouldn't tell customers to come back if it might be on someone else's shift.
For example...?
For example allocating funds to fire departments based on how many fires they put out. That encourages them to stop putting work into fire prevention and, at the extreme, creates an incentive for outright arson.
The medical system. (Does that even need explaining?)
I gather Australia's medical system is just as notoriously bad as America's (as per Yvain's excoriations)?
Finland's Healthcare system and to a lesser extent the NHS seem to mostly have proper incentives in place, as uncured folk means less capacity to treat oneself. Surely medical care the world over isn't guided by perverse incentives? That is more a question than an assertion.