What Motivates Us?
Prof. Mario Villarreal-Diaz claims that incentives matter, especially in a world of scarcity. Market prices, for instance, are a very powerful incentive. When the price of a good rises, consumers look for substitutes or ways to economize. Producers, on the other hand, look to increase output. When the price of a good falls, consumers will purchase more of it and producers will look for ways to cut back production.