Incentive structures
Incentive structures are a very important thing. They help you understand why someone is behaving the way they are, why someone took a certain action in a given situation. Everyone has incentives, and people act on them. People act to shift situations toward whatever fulfills their incentives. That is the root theory of this post.
Let’s work through an example. You go to a doctor, a good person by all appearances. The doctor asks you to get a set of tests done to rule out certain possibilities - and, to make it easier for you, asks you to get them done right outside the clinic. You do not have to travel far, it saves you time. So you go to that particular shop just because the doctor asked. In some cases the doctor will even refuse to work with results from anywhere else, saying they do not trust that place. You start to trust the place the doctor trusts, and you even tell your friends about it.
Then you find out - or someone tells you - about the conflict of interest. The doctor is incentivized for you to follow his directions. The lab outside pays him a commission, or he owns it himself. So he earns from you when you come for the consultation, and earns again when you buy the medicines, get the x-ray done, or come back for a bigger treatment.
Scale that up. A big hospital also helps patients - but it also helps the person who invested in it, because every patient who walks in has an average spend. The owner is incentivized to find ways to increase that average number without hurting the customers too much. That is the entire game: extract more money from your customers without hurting them so much that they leave for a better establishment.
And here is the dark line, stated carefully: a doctor who benefits from your visits is, through no fault of his own, incentivized to keep you coming back - which is uncomfortably close to being incentivized to keep you sick. No one wants that. Doctors are good people, good at heart. It is just that the economics points that way. Which means the real responsibility for your health lies in your own hands, because no one else will carry it. A doctor who gives you straight advice with nothing attached is a rare doctor, and a good one.
This is also why people prefer doctors who are relatives, or who belong to their social circle - someone with skin in the game. Such a doctor cannot afford to extract money from you, because word travels. His potential gain from pushing extra tests or medicines is tiny compared to the potential loss of a bad name in the town where he practices. By looping in someone you know, by being part of a circle with common people, you raise his stakes - and you flip his incentive. You create a win-win where the doctor is now genuinely incentivized to help you rather than to extract from you.
This structure shows up everywhere once you look. Manager and employee: the manager is not incentivized by how much work gets done but by how many people he promotes - I wrote a whole post about that one (Is it time to go solo?). Family situations. Friendships. Relationships. Take dating versus marriage. When you are dating, it is in your best interest to put your best self forward, because both people still have optionality - be too much of a pain in the ass and the other person can leave and find someone else. Once you are married, you know your partner is not going anywhere - so you can tease them a bit, trouble them a bit, and get away with it. The incentive changed, so the behavior changed.
The same logic runs the media you consume. Content that makes you emotional and keeps you engaged gets rewarded; content that makes you think does not. Rage bait is not a cultural accident - it is what the incentive structure of attention pays for, the same way badly chosen metrics produce badly chosen behavior everywhere else (bad metrics, bad outcomes).
So when someone’s behavior confuses you, do not ask whether they are a good person or a bad one. Ask what their incentive is. The action almost always follows it.