Zach Du, Chapter 2, Question 6

In Chapter 2, Wheelan talks about how incentives affect the economy: people often have "similar but not identical incentives, the distinction between similar and identical can make all the difference"(43). For example, on the sell side of an real-estate agency, the ideal scenario is: the higher the price you sell your house, the more money the agency will make. But in real life, the incentive does not always match the case. Suppose you want to sell the house for $100,000, your agent can easily sell for $80,000 in a day; on the other hand, your agency can sell the for $120,000 to get both of you a better price in a month. Though the second option can bring both of you more money, selling at a higher price means the agent has to work twice as hard as the first one, which is definitely not the best choice for your agent. This example illustrates that people's incentives are important, and always be aware of the difference between your incentives and others, since it might affect you in many different ways in real life.