Incentives Matter But So Does Context

Economist Steven Landsburg famously claimed that economics can be defined in two words: “incentives matter.”  For Landsburg, all else is commentary.  In a 2013 book entitled The Why Axis, Uri Gneezy and John List explore in detail how incentives matter.  Characterizing economics as a behavioral science, they seek to understand what affects individual behavior based on exploring various incentives and contexts.  In particular, they use field experiments to illuminate which incentives matter and how through examples drawn from a number of policy areas including child day care, school performance, charitable giving, gender-related compensation, and health care.  For more including a few examples, go here.