My family have decided that I am too sarcastic. I concurred. So, I agreed to sign an anti-sarcasm contract :
“Under pain of having to donate $1 toward Lego for every infraction, I hereby declare my intention to eschew sarcasm.”
The kids were making $8/day for the first few days till I learned a little self-control. So far so good.
Then, weird little things started happening. A child would ask innocently: “Can we have second dessert?” Or “Can I skip homework today?” etc. I would unfortunately respond with sarcasm.
I realized that the attempt to deal with my sarcasm by giving me incentives had created another incentive problem. I tried to change the contract so the money goes to charity but my kids refused to renegotiate….Is there some corollary of the Holmstrom moral hazard in teams model that says our it is impossible to implement optimal incentives with budget balance?