I was waiting for the Economist to put in its obligatory piece on the latest Nobel Memorial Prize in Economics. (The qualifier "Memorial" is there to pay tribute to the hardcore sciences of physiology, chemistry, and physics, which are the original Nobel Prizes.) At last I have something to free-ride on.
In my line of work "incentive compatibility" crops up frequently - it means that we should expect an agent to behave consistent with her incentives. Incentive compatibility is one of the keystones of mechanism design. It may sound trivial, but responses to incentives are naively ignored, say, in government policy. If for instance government is so distressed by rampant smuggling, perhaps in ought to wonder whether all those import restrictions actually spawned incentives for evasion (i.e. by creating a premium of the domestic price over the world price). Or that tax exemptions on dependents is not going to help curb the fertility rate. Examples can be multiplied. And don't get me started over the pardon of former President Estrada.