Let’s Make a Sustainably Better Future
Unintended Does Not Mean Unforeseeable
Bad laws create predictable unwanted outcomes.
Our legislatures make entirely predictable mistakes. Many of those mistakes are avoidable.
In this series, I explore the current best hope of the ESG movement, stakeholder capitalism. Its advocates want stakeholder capitalism to replace shareholder capitalism as the driving factor behind corporate actions.
But are we pinning our hopes on a doomed strategy? Doomed why? Read on to find out. This is the last of the Stakeholder Capitalism series, Part 8.
People are flawed, but predictably so
Psychology and behavioral economics provide us with a pretty good understanding of how to motivate people.
Turns out, if you assume people are selfish and lazy, you can predict very well how they’ll respond to an incentive.
People respond much better to positive incentives than negative ones. See Do Positive or Negative Incentives Work Better? Thus, encourage the behavior you want with positive incentives rather than trying to mandate it with negative incentives.
