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The fundamental problem with incentives is that they're asymmetric in nature: The incentivee has a lot more time (and direct motivation) to come up with a way to game the incentive than the incentivizer can spend when setting it.

The only real way to address that is to revise incentives on a frequent and regular basis — but who wants to do that? Certainly not legislatures.



That's true. I found a lucrative opportunity recently and identified and removed the bottlenecks that were throttling my earnings through bad processes on the client's side. As a software and network engineer, I found much faster ways to get things done. I am working on an app to make it even faster.

That is what flat rates do - the side willing to work for a flat rate optimizes the processes to make that rate work for them.

Now everything gets resolved in one service call, but my effective hourly rate is high enough to work around every inefficiency. I have an incentive to find everything that is wrong with that location and fix it regardless of what the original service call description says. That is just a starting point as far as I am concerned.

If that company invested a small amount in producing technical training for field technicians and bolstering staffing at their inexpensive offshore call center, I would have had meaningful competition. I imagine if they hired consultants, they would see that as a report.

I hold unique institutional knowledge like undocumented direct phone numbers to relevant people at client organizations that I have a very big incentive not to share.




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