Community-created

Incentives: The Hidden Engine of Economics

by Kevin

A from-scratch journey into microeconomics through its most powerful idea: people respond to incentives. Real stories of bounties, markets, backfires, and clever designs reveal why the world works the way it does.

Library

Lesson 1

The Cobra Bounty That Bred More Cobras

Delhi paid cash for every dead cobra it received — the dead snakes poured in, yet somehow the city ended up with more live cobras than before. What went wrong?

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Lesson 2

The Profit That Wasn't There

Maria's bakery books show a healthy $70,000 profit — so why does an economist looking at the exact same numbers insist she loses money every year she keeps it open?

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Lesson 3

Why a Useless Rock Costs More Than the Stuff of Life

Water keeps you alive and costs pennies; a diamond does nothing and costs a fortune — the puzzle stumped the father of economics himself, because everyone was measuring the wrong thing.

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Lesson 4

The Ten-Cent Miracle Nobody Understands

Millions of strangers on five continents help build every ten-cent pencil, none of them knows the others exist, and there is no one in charge — so why isn't it chaos?

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Lesson 5

The $70 Bottle of Hand Sanitizer

In early 2020, hand sanitizer jumped from $1 to $70 a bottle — but sellers who tried to 'set' their own price ended up with either bare shelves or boxes nobody wanted, so who is actually in charge of a price?

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Lesson 6

Gas Lines and Empty Shelves: When Prices Are Forbidden

The same oil crisis hit every country in 1973 — but only in America did drivers wait hours in line and fight at the pumps. What was different here?

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Lesson 7

The Nail Factory That Made One Giant Nail

Soviet factories hit every target and produced useless junk. Learn why measuring the wrong thing rewards the wrong behavior.