Weekly quote #33: Mike Munger July 9, 2008
Posted by ocmpoma in : economics , trackbackThis week’s EconTalk has Mike Munger as guest, talking with host Russ Roberts about public transportation. The quote shows up at a little after the twelve-minute mark of the podcast, and is spot on as to why I don’t really see the difference between the public and the private sector (except for the public sector’s (usually) greater access to legal power):
“It’s not just true that people respond to incentives in markets. People respond to incentives in every situation they find themselves. And so, the way that we compensate drivers — it doesn’t matter if it’s a market setting or if he’s employed by the government, it’s going to have implications for his behavior.”
People respond to incentives, period. Regardless of whether it’s a railroad tycoon or a parliamentary tycoon, the incentives are directly influencing the decisions being made.
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