Wednesday, April 28, 2010

Perverse Incentives

Corporations are money making machines. If we assume rationality (which is a basic economic premise), corporations respond to incentives due to their focus on maximizing profit. Prisons are a great example of this occurrence, yet, in this case, it is a PERVERSE incentive that drives the desire to put more people in prison for longer. Moreover, this perverse incentive is linked to our ideas on race and classism. It is a good starting point to think more about what perverse incentive structures exist in regards to race? Certainly predatory pricing falls under this category. Any other thoughts?

1 comment:

Note: Only a member of this blog may post a comment.