Economics Nobel For Exploring The Central Contention Of Economics – Incentives Matter

And it’s Glen Whitman who gave us the two things about economics:“Okay, here are the Two Things about economics. One: Incentives matter. Two: There’s no such thing as a free lunch.”That second can also be stated as “there are always opportunity costs.” And if you get those two ideas you will indeed have the core structure of economics at your fingertips. Opportunity costs means that there are always costs to doing something. Those costs being, at the very minimum, the lost opportunity to be doing all of the other things that you could have done instead. There simply isn’t anything at all that is without cost. It may well be that the benefits are greater than those costs, but nothing at all is without costs.And the first one, incentives matter, is the part that the Nobel was awarded for today. Not the observation of course, but the detailed examination of how this actually works out in life.

Source: Economics Nobel For Exploring The Central Contention Of Economics – Incentives Matter

Print Friendly, PDF & Email