Volatility of incentives

I believe that incentives drives behaviours. That is why big bureacracies are bound to retain mediocre individuals and repel talents. It is why high-paying jobs attract more people even if they are soul-sucking. It is also why high-impact but mediocre-paying jobs like teaching and nursing have people leaving in droves.

But incentives can also be volatile because market signals in the short term may not be a good reflection of fundamentals. That’s why people end up behaving in sub-optimal ways in pursuit of short-term gains. This could involve forging qualifications, attempting to get an increment from attending some third rate data analytics course, etc.

Can we trust incentives alone to govern our societies? Probably not. Because our purpose is greater than just responding to sticks and carrots. So more important to identify what purpose we want to fulfill and allow that to drive us forward. Blind pursuit of incentives bring us nowhere.