In order to best use the Steemit platform, to make money, to create and share content, and to build an all around better community, we must first understand the incentives for different types of 'Steemit Behaviour'.

When most people think of incentives, we think about very specific and focused rewards designed to illicit a specific behaviour from others. We are very familiar with the most common kind of incentive - a contract job for a set amount of money. Paint this fence, and I will pay you $100. Pretty straightforward, and very hard to 'game' this type of incentive. Either the fence is painted, or it isn't.

But what about complex behaviour? Or goals that are subjective? (reward "good" content, for example?). How do you build a system where the best content rises to the top, and the worst content is ignored? How do you combine that with a crypto-currency that you would like to be mass-adopted and also that holds its value? Perhaps a crypto-currency that you would also like to be traded, invested, held, spent, etc just like a 'regular' currency. How do you build the proper sets of incentives to make all of that happen?

"Incentives matter; not just the ones you like to think about, or fit your argument. All of them matter." Matthew Zietzke

The trouble with trying to incentivize complex behaviours or outcomes is that with complex systems, there are always unintended incentives also created. People naturally seek out all of the possible ways in order to capitalize on a reward - even if it runs counter to the original intent of the incentive.

A great example of this happened to the Los Angeles Police Department back in the early 1990's. There had been a string of high-speed police chases that had ended tragically with innocent bystanders getting killed. There was a lot of pressure on the department to make changes to their pursuit policy, because the public was being put at risk by all of the chases.

The department came up with new guidelines. If a suspect vehicle raced into a residential area, or into busy areas of town, and was traveling over a certain speed, then the officers were instructed to stop the pursuit. The policy was to let the perpetrator go for the sake of public safety.

So, what happened? Well, fatalities caused by high speed pursuits went up!! The criminals learned that if they raced into a residential neighbourhood, or towards a school or shopping district, that the police would stop pursuing - and they would get away! So that is exactly what they did. They drove even faster, and drove towards the very people that the new policy was trying to protect. Also, criminals who would not normally speed away were incentivized to do so - criminals who had never tried to run in the past were now speeding off towards the closest elementary school.

Eventually, the department had to change their policy yet again - but this time, they went the opposite direction. Instead of calling off pursuits, they now put in place a policy that stated that they would NEVER call off a pursuit, regardless of where it led, or how fast it got. What happened? Well, fatalities went back down as the criminals learned that there was no point running. No matter what they did, they were going to get caught. The number of high speed chases declined, and so did the fatalities.

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Stay tuned for Part 2 - where I will delve into the Steemit incentives, and their unintended consequences, as well as some of the community initiatives designed to "correct" those incentives.

Thank you for your support,

Snubbermike