Incentive structures
Came across a tweet from David Perell this week and have been thinking about it a lot.
...When in doubt, don’t blame individual people. Blame the incentives of the system.
I think this point is universally applicable and is related to asking the "why".
Incentivizes have a way of pushing people into behaviors and everyones' is different. Some examples:
Car salesperson - This is an easier one where the car salesperson is incentivized to sell cars and would say things to push inventory.
Then what about the car dealership owner? Maybe their incentive is to sell this car but maybe they could take a tradeoff where they don't sell this one car because they know you'll write a good Yelp review and then sell multiple cars.
Real estate agent - They're making a percentage commission off the sale of the home which makes them want to sell the home for more in order to make more. Or the incremental difference (3% of the sales price) doesn't represent a lot of money for them so they'd rather sell it quicker for less.
Oftentimes uncovering the incentivize structures helps in negotiating/investing as there's typically a win/win where you don't have to sacrifice and neither does the other party.
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PS - Here are some older posts! https://tinyletter.com/andrewluong/archive