HOW PEOPLE INTERACT

HOW PEOPLE INTERACT The first four principles discussed how individuals make decisions. As we go about our lives, many of our decisions affect not only ourselves but other people as well. The next three principles concern how people interact with one...

PRINCIPLE 4: PEOPLE RESPOND TO INCENTIVES

PRINCIPLE 4: PEOPLE RESPOND TO INCENTIVES An incentive is something (such as the prospect of a punishment or a reward) that induces a nerson to act. Because rational people make decisions by comparing costs and benefits, they respond to incentives. You will see that...