Jon Steinberg: Let\'s talk about the concept of economic incentive and perverse incentive. Economic incentive is basically the ability to earn revenue and make profit, and how that drives human behavior. A perverse incentive is when there\'s something in place that makes people go against what the interest of the business is

I\'ve most commonly dealt with this in salesforces where if a product is very hard to sell, despite it being highmargin and good for the business, salespeople might not try to sell it just because it\'s too hard to sell. In that case, you need to actually create an economic incentive, perhaps a higher commission rate or a bonus structure to get people to actually act upon it and sell that product.

One of the old sayings that really crystallizes the notion of market economy is: \"Show me how someone is paid and I will show you how they behave.\" Basically, you want to make sure that the flow of dollars, the way people are compensated, the way the business gets paid, lines up with the behaviors that you want people to execute on