From Cambridge to Here: “Accounting, Measurement and Metric”
“People Respond to Incentives,” or does the Harvard prof. Gregory Mankiw suggest as Principle 4 of Economics. In the market economy as well as in economics, the incentive is offered after accounting for the performance over a certain period. The baseline: As to “Rational People Thinking at the Margin” ( ditto 3), the marginal benefit in a particular period is the incentive and the time spent for the performance is the marginal cost . In the public place including the market, public accounting in modern times is always in terms of the sovereign currency unit. Or, the currency unit is the metric of accounting, or “the unit of account.” For simplicity, we name the dollar sign ($) as the unit. The Incentive. Generally speaking, incentives are offered in terms of the particular piece of paper, often called a “bill,” with the face of George Washington in the front. Practically, the vast majority of ...