The most difficult thing is to recognize that sometimes we too are blinded by our own incentives. Because we don’t see how our conflicts of interest work on us.

I don't think we should go around life and being miserable all the time and feel the pain of paying. It's a question of what categories we want to spend more on and what categories we want feel that we are spending too much on and we want to cut down.

When we think about labor, we usually think about motivation and payment as the same thing, but the reality is that we should probably add all kinds of things to it - meaning, creation, challenges, ownership, identity, pride, etc.

In the U.S., I think there is an ideology of not telling kids what to do. Nobody to tell you who to marry, not tell you what job to pick. You're your own person. You have the freedom to choose, including the freedom to fail in magnificent ways. And I think that's the big difference. In other countries there is basically a social norm about saving that is passed from generation to generation. In the U.S. there isn't.

We have very strong intuitions about all kinds of things — our own ability, how the economy works, how we should pay school teachers. But unless we start testing those intuitions, we’re not going to do better.

To summarize, using money to motivate people can be a double-edged sword. For tasks that require cognitive ability, low to moderate performance-based incentives can help. But when the incentive level is very high, it can command too much attention and thereby distract the person’s mind with thoughts about the reward. This can create stress and ultimately reduce the level of performance.

If I gave you now, $10 as a gift, how happy would you be? Would you be happy, is the marginal $10, the best use of $10 you can use? Of course not. If I have you a CD, you know exactly what you are getting and you will have a value for it. So, money has lots of problems with it.