CHAPTER FOUR
Transforming Self-Interest
Imagine a hot day, with the sun blazing brightly. A sharecropper is toiling in the field, working hard. He would love to take a breather and relax under the cool shade of a nearby tree, but he will be paid at the end of the day based on how much he harvests. He has a family to feed, and the more he harvests, the more wages he makes. He decides he can rest when he gets home in the evening. Now it is time to work hard and harvest as much as he can before dusk. This is, of course, precisely how the landowner would like the sharecropper to reason—work harder and get paid more; goof off and get paid less.
This story illustrates the workhorse model in economics that describes the relationship between employers ...
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