As I read about perverse incentives and was asked to provide an example, I quickly thought about our sales team's commission structure. I work for a large corporation as a data warehouse analyst and my daily responsibilities include pulling information straight from our different business unit's ERP systems. One of the outmost reasons why we have this data warehouse is to monitor sales across the business and flag any unethical reporting during performance appraisals. With our reporting year ending in December, our open sales orders usually spike across the board as our sales teams scramble to get every last order through the system and at times, we have found that some employees will fudge their numbers to get their annual bonus and then go back and cancel orders. These sales employees are under so much pressure to hit their numbers that they will find loopholes to hit their goals and cover up the consequences later on.

On a related note, we have also found times where employees have already hit their commission bonus for the year, so they will hold any orders until the first of the year or when their quota has reset to get that extra head start on the program. The purpose of my job is to flag situations as mentioned and help reduce inaccurate, unethical reporting. (I work for a great company and the above examples are rare throughout the company, but a great example of unethical outcomes due to well-intended goals).

Skipping a tad bit ahead to chapter 5 in the course text, but another topic I enjoyed reading was related to adverse selection which the authors explain happens "arises when one party to a transaction is better informed than another" (243). In my current workplace, we are working with one of the business units on a competitive quoting tool. It uses 25 years of historical data to pull an estimate based on local competitors and help the business not only win the bid but win it at most profitable bid. I realize this isn't directly referencing adverse selection, however, I view it as our business having better/extra information than the other parties.

**How would you reply to these questions