Incentives: Motivation and the Economics of Information

This book shows how to design an incentive environment so that self interest is harnessed in a way that leads to efficient outcomes. It also identifies the limitations of incentive theory, i.e. the boundaries where material incentives cannot be used to overcome any bad side effects of the pursuit of self interest. A wide range of institutions and problems are explored using specific worked examples, lucid general theory, and illustrations drawn from news stories. Boxed examples are used to highlight points of theory and are separated from the main text.