The importance of incentives

This story is a great example of how institutions can shape incentives, in order to change outcomes.

The women of Barbacoas, Colombia have ended a three-month, 19-day “crossed legs” strike of sexual abstinence aimed at getting a road to their isolated town paved, after officials pledged to invest in the project.

The money quote is:

“The men’s first reaction was laughter, because they found the way we were protesting very curious,” Silva said.

Then reality set in, and work on the road finally began last week as the government had promised.

Now, my question is – is this optimal or not?

On one side, the women were signaling the high value they place on the project through their actions – and are in one sense trading sex for a road.

On the other hand, the women are in a position of power – and are changing the bargaining position so that they can extract more surplus from this trade.

Truly, there is economics everywhere

  • I’m normally an antitrust sceptic. But in this kind of case, I’d make an exception.

  • Are you saying that woman are in a position of dominance?

    (in an antitrust sense of course…)

  • So many questions. How is the creditability of the threat to be maintained? The longer the strike goes, the higher the costs on all parties. What does it say about the relative value of sex between men and women? What is the role of substitutes?