C&B Notes

The Economic Way of Thinking

In a client letter from several years ago, we used an oft-repeated phrase by Tony Carilli: “Incentives matter!”  We use this idea almost daily as we think about the incentive structures that surround and are employed by businesses.  In this video, Dr. Carilli — one of David and Richard’s economics professors at Hampden-Sydney College — shares a broader idea of how choices are made and proposes a framework for making sense of the social world:

“The economic way of thinking starts with a simple premise:  all social phenomena emerge from the actions and interactions of individuals who make choices after weighing costs and benefits to themselves…The things we see that are social in the world are outcomes of a decision-making process.

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