Incentive in the context of Incentivisation

Environmental remediation is the cleanup of hazardous substances dealing with the removal, treatment and containment of pollution or contaminants from environmental media such as soil, groundwater, sediment. Remediation may be required by regulations before development of land revitalization projects. Developers who agree to voluntary cleanup may be offered incentives under state or municipal programs like New York State's Brownfield Cleanup Program. If remediation is done by removal the waste materials are simply transported off-site for disposal at another location. The waste material can also be contained by physical barriers like slurry walls. The use of slurry walls is well-established in the construction industry. The application of (low) pressure grouting, used to mitigate soil liquefaction risks in San Francisco and other earthquake zones, has achieved mixed results in field tests to create barriers, and site-specific results depend upon many variable conditions that can greatly impact outcomes.

Remedial action is generally subject to an array of regulatory requirements, and may also be based on assessments of human health and ecological risks where no legislative standards exist, or where standards are advisory.

A bonus payment is usually made to employees in addition to their base salary as part of their wages or salary. While the base salary usually is a fixed amount per month, bonus payments more often than not vary depending on known criteria, such as the annual turnover, or the net number of additional customers acquired, or the current value of the stock of a public company. Thus bonus payments can act as incentives for managers attracting their attention and their personal interest towards what is seen as gainful for their companies' economic success.

There are widely-used elements of pay for performance and working well in many instances, including when a fair share of an employee's participation in the success of a company is desired. There are, however, problematic instances, most notably when bonus payments are high. When they are tied to possibly short-lived such as an increase in monthly turnover, or cash flow generated from an isolated marketing action, such figures often do not reflect solid and reliable growth for a company, or an employee's particular efforts. Australian retail entrepreneur Gerry Harvey, while supporting bonuses for long-term company performance, has stated that:

A tax incentive is an aspect of a government's taxation policy designed to incentivize or encourage a particular economic activity by reducing tax payments.

Tax incentives can have both positive and negative impacts on an economy. Among the positive benefits, if implemented and designed properly, tax incentives can attract investment to a country. Other benefits of tax incentives include increased employment, higher number of capital transfers, research and technology development, and also improvement to less developed areas. Though it is difficult to estimate the effects of tax incentives, they can, if done properly, raise the overall economic welfare through increasing economic growth and government tax revenue (after the expiration of the tax holiday/incentive period). However, tax incentives can cause negative effects on a government's financial condition, among other negative effects, if they are not properly designed and implemented.

In economics, a perverse incentive is an incentive structure with undesirable results, particularly one where those effects are unexpected and contrary to the intentions of its designers.

The results of a perverse incentive scheme are also sometimes called cobra effects, where people are incentivized to make a problem worse. This name was coined by economist Horst Siebert in 2001 based on a historically dubious anecdote taken from the British Raj. According to the story, the British government, concerned about the number of venomous cobras in Delhi, offered a bounty for every dead cobra. Initially, this was a successful strategy; large numbers of snakes were killed for the reward. Eventually, however, people began to breed cobras for the income. When the government became aware of this, the reward program was scrapped, and the cobra breeders set their snakes free, leading to an overall increase in the wild cobra population.

Criticism of Marxism has come from various political ideologies, campaigns and academic disciplines. This includes general intellectual criticism about dogmatism, a lack of internal consistency, criticism related to materialism (both philosophical and historical), arguments that Marxism is a type of historical determinism or that it necessitates a suppression of individual rights, issues with the implementation of communism and economic issues such as the distortion or absence of price signals and reduced incentives.

In addition, critics have raised empirical and epistemological concerns, arguing that Marxism relies on vague or unfalsifiable theories, resists refutation through dialectical reinterpretation, and has failed key predictions about capitalist collapse and socialist revolution.

The terms special edition, limited edition, and variants such as deluxe edition, collector's edition or expanded edition are used as a marketing incentive for various kinds of products, originally published products related to the arts, such as books, prints, recorded music and films, and video games, but now including clothing, cars, fine wine, and whisky, among other products. A limited edition is restricted in the number of copies produced, although in fact the number may be very low or very high. Suzuki (2008) defines limited edition products as those “sold in a state that makes them difficult to obtain because of companies limiting their availability to a certain period, quantity, region, or channel". A special edition implies there is extra material of some kind included. The term is frequently used on DVD film releases, often when the so-called "special" edition is actually the only version released.

Commissions are a form of variable-pay remuneration for services rendered or products sold. Commissions are a common way to motivate and reward salespeople. Commissions can also be designed to encourage specific sales behaviors. For example, commissions may be reduced when granting large discounts. Or commissions may be increased when selling certain products the organization wants to promote. Commissions are usually implemented within the framework on a sales incentive program, which can include one or multiple commission plans (each typically based on a combination of territory, position, or products).

Payments are often calculated using a percentage of revenue, a way for firms to solve the principal–agent problem by attempting to realign employees' interests with those of the firm. However, models other than percentages are possible, such as profit-based approaches, or bonus-based approaches. Commissions allow sales personnel to be paid (in part or entirely) based on products or services sold, rather than just hourly or based on attempted sales. Although many types of commission systems exist, a common methodology to manage total spend is known as on-target earnings. On-target earnings represent a salesperson's base pay, plus expected commissions (assuming the salesperson meets a quota). On-target earnings help salespersons estimate their expected total compensation, should they meet company-specified goals.

In marketing, a rebate is a form of buying discount and is an amount paid by way of reduction, return, or refund that is paid retrospectively. It is a type of sales promotion that marketers use primarily as incentives or supplements to product sales. Rebates are also used as a means of enticing price-sensitive consumers into purchasing a product. The mail-in rebate (MIR) is the most common. An MIR entitles the buyer to mail in a coupon, receipt, and barcode in order to receive a check for a particular amount, depending on the particular product, time, and often place of purchase. Rebates are offered by either the retailer or the product manufacturer. Large stores often work in conjunction with manufacturers, usually requiring two or sometimes three separate rebates for each item, and sometimes are valid only at a single store. Rebate forms and special receipts are sometimes printed by the cash register at time of purchase on a separate receipt or available online for download. In some cases, the rebate may be available immediately, in which case it is referred to as an instant rebate. Some rebate programs offer several payout options to consumers, including a paper check, a prepaid card that can be spent immediately without a trip to the bank, or even as a PayPal payout.

Profit sharing refers to various incentive plans introduced by businesses which provide direct or indirect payments to employees, often depending on the company's profitability, employees' regular salaries, and bonuses. In publicly traded companies, these plans typically amount to allocation of shares to employees.

The profit sharing plans are based on predetermined economic sharing rules that define the split of gains between the company as a principal and the employee as an agent. For example, suppose the profits are ${\displaystyle x}$, which might be a random variable. Before knowing the profits, the principal and agent might agree on a sharing rule ${\displaystyle s(x)}$. Here, the agent will receive ${\displaystyle s(x)}$ and the principal will receive the residual gain ${\displaystyle x-s(x)}$.

Denunciation (from Latin denuntiare, "to denounce") is the act of publicly assigning to a person the blame for a perceived wrongdoing, with the hope of bringing attention to it.Notably, centralized social control in authoritarian states requires some level of cooperation from the populace. The following two forms of cooperation occur: first, authorities actively use incentives to elicit denunciations from the populace, either through coercion or through the promise of rewards. Second, authorities passively gain access to political negative networks, as individuals denounce to harm others whom they dislike and to gain relative to them. Paradoxically, social control is most effective when authorities provide individuals maximum freedom to direct its coercive power. The most famous informer in western cultural history is Judas - according to the New Testament, Judas, one of the twelve disciples of Jesus of Nazareth, betrayed Jesus, making his arrest and his subsequent delivery to the Romans possible.

Commonly, denunciation is justified by proponents because it allegedly leads to a better society by reducing or discouraging crime. The punishment of the denounced person is said to be justified because the convicted criminal is morally deserving of punishment. Yet, this reasoning does not present a compelling argument for society's right to inflict punishment on a specific individual. Society may recognize a crime's impact on law-abiding society, but traditional punishment theories do not even attempt to deal with punishment's effect on law-abiding society. Just as punishment may impact potential lawbreakers, it may also impact those who abide by the law. To fully understand society's right to inflict punishment, one must recognize punishment's full impact on all segments of society, not just on potential lawbreakers.

Injury prevention is an effort to prevent or reduce the severity of bodily injuries caused by external mechanisms, such as accidents, before they occur. Injury prevention is a component of safety and public health, and its goal is to improve the health of the population by preventing injuries and hence improving quality of life. Among laypersons, the term "accidental injury" is often used. However, "accidental" implies the causes of injuries are random in nature. Researchers prefer the term "unintentional injury" to refer to injuries that are nonvolitional but often preventable. Data from the U.S. Centers for Disease Control show that unintentional injuries are a significant public health concern: they are by far the leading cause of death from ages 1 through 44. During these years, unintentional injuries account for more deaths than the next three leading causes of death combined. Unintentional injuries also account for the top ten sources of nonfatal emergency room visits for persons up to age 9 and nine of the top ten sources of nonfatal emergency room visits for persons over the age of 9.

Injury prevention strategies cover a variety of approaches, many of which are classified as falling under the "3 Es" of injury prevention: education, engineering modifications, and enforcement/enactment of policies. Some organizations and researchers have variously proposed the addition of equity, empowerment, emotion, empathy, evaluation, and economic incentives to this list.

From an economic perspective, contract theory studies how economic actors can and do construct contractual arrangements, generally in the presence of information asymmetry. Because of its connections with both agency and incentives, contract theory is often categorized within a field known as law and economics. One prominent application of it is the design of optimal schemes of managerial compensation. In the field of economics, the first formal treatment of this topic was given by Kenneth Arrow in the 1960s. In 2016, Oliver Hart and Bengt R. Holmström both received the Nobel Memorial Prize in Economic Sciences for their work on contract theory, covering many topics from CEO pay to privatizations. Holmström focused more on the connection between incentives and risk, while Hart on the unpredictability of the future that creates holes in contracts.

A standard practice in the microeconomics of contract theory is to represent the behaviour of a decision maker under certain numerical utility structures, and then apply an optimization algorithm to identify optimal decisions. Such a procedure has been used in the contract theory framework to several typical situations, labeled moral hazard, adverse selection and signalling. The spirit of these models lies in finding theoretical ways to motivate agents to take appropriate actions, even under an insurance contract. The main results achieved through this family of models involve: mathematical properties of the utility structure of the principal and the agent, relaxation of assumptions, and variations of the time structure of the contract relationship, among others. It is customary to model people as maximizers of some von Neumann–Morgenstern utility functions, as stated by expected utility theory.

In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it will not bear the full costs associated with that risk. For example, when a corporation is insured, it may take on higher risk knowing that its insurance will pay the associated costs. A moral hazard may occur where the actions of the risk-taking party change to the detriment of the cost-bearing party after a financial transaction has taken place.

Moral hazard can occur under a type of information asymmetry where the risk-taking party to a transaction knows more about its intentions than the party paying the consequences of the risk and has a tendency or incentive to take on too much risk from the perspective of the party with less information. One example is a principal–agent approach (also called agency theory), where one party, called an agent, acts on behalf of another party, called the principal. However, a principal–agent problem can occur when there is a conflict of interest between the agent and principal. If the agent has more information about their actions or intentions than the principal then the agent may have an incentive to act too riskily (from the viewpoint of the principal) if the interests of the agent and the principal are not aligned.

Referral marketing is a word-of-mouth initiative designed by a company to incentivize existing customers to introduce their family, friends, and contacts to become new customers. Unlike pure word-of-mouth strategies—where customers independently share information without company involvement or ability to track—referral marketing actively incentivizes and rewards existing customers for referring new ones, allowing the company to influence, track, and measure the referral process.

The process is distinct from multi-level marketing, in that there is no incentive for the original existing customer to drive or influence the subsequent referrals of the new customer – only the conversion of the initial, primary customer is rewarded.

The following outline is provided as an overview of and topical guide to economics. Economics is a branch of science that analyzes the production, distribution, and consumption of goods and services. It aims to explain how economies work and how agents (people) respond to incentives.

Economics is a behavioral science (a scientific discipline that focuses on the study of human behavior) as well as a social science (a scientific discipline that explores aspects of human society).