Regarding the matter of incentives -- tax an activity and you will get less of it; pay people for an activity and you will get more of it -- Terry Paulson had a great illustration in his column today:
"What if the next time you went to a department store, they locked the doors, identified the top 10% of the wealthiest customers and forced them to pay for the purchases of all of the other customers in the store. If you received free purchases, you’d be surprised and certainly happy. You’d probably come back with your friends! But what are the chances those wealthy clients would return? How long would it take until you were now the top 10% forced to pay the whole bill? Incentives matter and always will."
This is reminiscent of the "Ten Men at Dinner" parable.
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