That incentives matter is a given in principles of economics. I begin my courses on the subject by talking extensively about incentives – their etymology, their types (negative and positive, monetary and non-monetary), what happens if (when?) incentive design goes wrong, etc., etc.
By the way, did you know that the word incentives comes from incantations and chanting? True story!
But incentive design can be done for, or on, oneself too. And when done well, truly great things can happen.
Sarthak Dev, author of the excellent blog Lines On The Grass, tells us how by talking about two of my favorite sportspersons: Michael Jordan and Virat Kohli.
As anybody who’s watched the documentary series The Last Dance will tell you, Jordan says that he took it personally about fifty million times in that series. And that is probably an understatement.
But Sarthak points out, in his post, that this was just Jordan creating an incentive for himself. Playing at his very best, day in and day out, for as long as he did, cannot just have not been easy – it must have been impossible.
So how should he go about motivating himself? By picking a fight, of course. By imagining that the world was against him, or even better, by imagining that a specific person was against him, or had said or done something that was a “personal” insult.
This can be a coach on the opposing team who doesn’t say hello, this can be a trash talking opponent, or this can be an opponent getting an accolade that Jordan thought belonged to him.
Whatever.
The word “whatever” isn’t used in the colloquial sense here – I mean it literally. The specifics don’t matter, neither does the person, and as in the case of Bradford Smith, neither does reality. What matters is that Jordan was able to convince himself that an injustice had been done to him, and that this needed an express, extra-large delivery of vengeance.
Which, of course, Jordan delivered, year in and year out.
Me, the nerdy econ prof, I prefer to say that Jordan was designing incentives for himself.
And, you could argue, Virat is doing the same thing these days:
Taking a dig at his critics during the post-match discussions, Kohli said, “All the people who talk about strike rates and me not playing spin well are the ones who love talking about this stuff. But for me, it’s just about winning the game for the team. And there’s a reason why you do it for 15 years – because you’ve done this day in [and] day out; you’ve won games for your teams.”
“I am not quite sure if you’ve been in that situation yourself to sit and speak about the game from a box. I don’t really think it’s the same thing. So for me, it’s just about doing my job. People can talk about their own ideas and assumptions of the game, but those who have done it day in [and] day out know what’s happening, and it’s kind of a muscle memory for me now.”
I’m a Manchester United fan (about which we shall not talk, now or forever), and old enough to remember the famous siege mentality that Sir Alex was able to generate, time and again. But regardless of whether it is Jordan, or Kohli, or Sir Alex, all that they’re doing is creating incentives that work, for themselves.
There are two lessons here.
First, nothing stops us from creating these incentives for ourselves. Who better than us to know what will work in our case? Be warned, though, this is tricker than it looks. For while it is true that nobody knows us better than ourselves, it is also true that this makes it easier for us to ignore the incentives we have created for ourselves!
I can take pretend to take offense at person X for saying that I don’t write often enough on EFE, for example, and to “show him”, I can promise to write daily for the next seven years. But he, I and you – we all know that a “Chod na yaar” is in my destiny, sooner or later.
Second, yes, incentives matter, but so do opportunity costs:
Cricket did not start the day Kohli made his debut—I am no fan of the commentary on offer, but some at least of those commentators have been there and done that, maybe even better. I mean, you want to tell, say, Brian Lara that he doesn’t know what being out in the middle is like?
Someone should tell him that, besides the bad taste such comments leave in the mouth, he is merely leaving himself wide open.
You speak like this on the back of one innings in a winning cause, what do you suppose is going to happen the next time you fail, and/or your team loses—as will inevitably happen?
Tricky ol’ business, economics.
EconForEverybody 