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Introduction to Microeconomics: Incentives

Geoff Riley

1st September 2026

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Incentives are the primary levers that drive human behavior and solve the problem of scarcity. Economics operates on a simple premise: people respond rationally to costs and benefits. If a government wants to reduce carbon emissions, it can impose a negative incentive like a carbon tax to increase the marginal cost of pollution. Conversely, a firm might offer positive financial incentives, like bonuses, to increase worker productivity. Ultimately, understanding incentives is the key to predicting how any market or policy will actually function

Introduction to Microeconomics: Incentives

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Geoff Riley

Geoff Riley FRSA has been teaching Economics for nearly forty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD and Revision conferences in the UK and overseas.

@tutor2uGeoff

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