Incentives

Economics is about how people (or governments, firms, etc) makechoices under uncertainty. We assume that people are rational,meaning that when they make decisions, they weigh the costs andbenefits of the different choices, and then choose whatever willmake them better off. Incentives are a reward or punishment.Combined with our rational actor, incentives give us a frameworkfor trying to influence behavior. If we want people to drive moreslowly in a school zone, we can change the costs of speeding or thebenefits of driving slowly. Fines and cameras are (negative)incentives to get people to slow down. If we want people to stay athome during a pandemic, we just need to change the incentives. Weare seeing this happen in real-time: some localities are arrestingor fining people that ignore the stay at home order, raising thecost of leaving the house for an approved reason. Other approacheshave tried to encourage people to stay home by increasing thebenefit. For example, HBO has made many of their old showsavailable free online to encourage people to stay home (If youhaven't seen them Silicon Valley and Barry are both highlyrecommended)

Incentives and Vaccines

We desperately need a vaccine if we are ever going to return toanything resembling normal life. So how can we use what we knowabout incentives to encourage people to develop new ideas like avaccine? Watch the following video and then write a paragraph (orso) about incentives and vaccines.