This week we learned a new model that helped us better understand consumer behavior and the incentives that drive people to satisfy their wants to particular ways. We saw the key comparison was the marginal utility/price of one option, compared to the marginal utility/price of another option. People, naturally working in their self interest will spend more money (or time) on the things that have higher marginal utility/price than other options.

The above insights imply that if you want to change a behavior, you should try to change the incentive. If you are trying to get more of a behavior, you should increase the marginal utility derived from the behavior, and or decrease the cost of the behavior. And if you are trying to decrease an behavior you should devise a plan the either decreases the marginal utility derived and/or increases the cost associated with the behavior.

Lets put this logic to the work. Think of an incentive scheme to do one of the following:

Change one of your own behaviors. What is something you are trying to do more of, or less of? How can you change the marginal utility and/or cost of the behavior to strengthen the incentive.

Change one behavior of someone you care about (kids, boyfriend/girlfriend, spouse, parent...) What is something you can help them do more of, or something you can help them do less of? How can you change the marginal utility and/or cost of the behavior to strengthen the incentive. Also discuss if this behavior is something the other person wants to change themselves, or you just think they should change (which is called paternalism). Do the incentive strategy change in either case?

Change the behavior of your customers/clients.(you can do this option if you are an entrepreneur, a manager, or even if you are just a working interacting with customers at any level) What is something you want your customers to do more of, or something you want them to do less of. How can you change the marginal utility and/or cost of the behavior to strengthen the incentive?

For any of the above you chose, remember the goal is to make the desired change in the person's self interest. Economic says that is your best chance at getting the desired change. Trying to force someone (or yourself) to make a change that is not in their self interest is a losing battle. Write around 400 words