Incentives.

I've just finished reading SuperFreakonomics (finally! after 48 days, with constant interruptions!). If you're doing any form of Economics, I suggest you read this book - it'll help with your microeconomics, not because it's a revision guide, but because it makes the subject come alive. Just make sure you read this book with an open mind and from a matured point of view. Because it does talk about prostitution patterns around holiday seasons.

I've been pondering about one theme that constantly pops up in a subliminal way in the book - Incentives. Economists would like to think we, being rational human beings, react to incentives.

People choose to Bit Torrent their favourite TV shows rather than buy a DVD because they have the incentive of saving money and travelling/waiting time, while enjoying, maybe, a higher quality version (HD?).

People have an incentive to take public transport because they won't have to worry about the cost involved in owning a car - taxes, fuel, insurance, etc.

Secondary school students used to join CCAs because that meant they get more CCA points, which can potentially cut off 2 points from their L1R5, allowing them to gain access into better JCs. But if the CCA Points system was to be stopped in a certain year, will people continue to join CCAs? Or would they prefer something else - maybe LAN gaming? or sleeping at home? or TV?

Students in my school tend to leave 3 days before the end of the term because they know this is the time when all the students disappear, and the teacher don't do much other than chat with you in an effort to, well, kill time before the period ends. Because they can't carry out their lesson plan, or else 80-90% of the class would be left out. And besides, extending your holiday back home by another 3 days - who wouldn't want that? And furthermore, there's no loss by going back home 3 days earlier, because there's no way to punish, and if the teachers were to alert the parents, erm, the parents kind-of knew the students skipped 3 days of lessons already, actually. So what's the point?

The above examples are pretty obvious cases of incentives in action.

But then I've been thinking of some other scenarios where incentives don't seem to fit in to the reason people do certain things.

1. Twitter. Facebook. Web 2.0 stuff.
What is the incentive for people to use social networks? If you were a media company, that's obvious - marketing. But if you're John Doe, an ordinary folk who happens to own a computer, why should you spend time on Farmville?

2. Charity. Altruism. Good deeds.
What is the incentive for people to do charity work? What makes people volunteer to serve? Why do people lend money to strangers?

3. Crime.
What is the incentive for people to commit a crime? I mean, there's a lot of disincentives, but there are people who constantly challenge the law. So there has to be an incentive there, right?

Well, what do you think? Toss in your theories on the tagboard or in the comments section.

Before I end off this post, I want to talk more on number 2.

We all like to think we are nice people. We think we enjoy helping others, and sometimes, we help others, through direct or indirect means, often expecting nothing in return. We call in when there's donation drives on TV (ok, there's some corruption in some organisations, but we'll overlook that in this post). We might even go on visits to institutions and meet people who need help.

But why is it that in a world where there are people who can afford to own a yacht, there are also people who worry if they can find water or food tomorrow? Why is it that in a city where there's Lamborghinis and Mercedes SLKs parked outside the houses in it, there are also people who sleep on the streets and beg for money? Why is it that in a country where there's people who are well-off, there's also people who are starving?

I've been involved in the 'Helping People' team in my church, and we've been trying to find ways to reach out to the community and help those in need. It's quite shocking to see the homeless people all around Brighton. And that's not the only problem in this area. Sexual abuse, domestic violence, drug abuse, there's so many areas that need help.

But then I realised - if God has blessed me with the abundant provisions in the form of physical ways (as well as social ways, in the form of love and care from the people around me), perhaps I should share these with others who lack them.

I really believe that if you feel that you have been blessed, you should bless others and fill someone's need. It can be academic, it can be social, or maybe someone just needs a little encouragement. If you have the ability to help, then go forth and lend a hand, an ear, or whatever the need is.

It's Christmas season, a time of giving. Think of doing something nice!