The Myth of the Rational Voter: Why Democracies Choose Bad Policies

by Bryan Caplan

A common summary of the experimental literature is that incentives improve performance on easy problems but hurt performance on hard problems.86 As Einhorn and Hogarth argue: Performance . . . depends on both cognition and motivation. Thus, if incentive size can be thought of as analogous to the speed with which one travels in a given direction, cognition determines the direction. Therefore, if incentives are high but cognition is faulty, one gets to the wrong place faster.87 What Camerer and Hogarth highlight, however, is that the difficulty of a problem falls if you have more time and flexibility to solve it. Hard problems naturally decay into easier problems. Once they are easy enough, incentives work like they are “supposed to.”