An incentive is something that motivates an individual to perform an action. The study of incentive structures is central to the study of all economic activity (both in terms of individual decision-making and in terms of co-operation and competition within a larger institutional structure). Economic analysis, then, of the differences between societies (and between different organizations within a society) largely amounts to characterizing the differences in incentive structures faced by individuals involved in these collective efforts. Ultimately, incentives aim to provide value for money and contribute to organizational success.
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Famous quotes containing the word incentive:
“Above all, though, children are linked to adults by the simple fact that they are in process of turning into them. For this they may be forgiven much. Children are bound to be inferior to adults, or there is no incentive to grow up.”
—Philip Larkin (1922–1986)