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Comment by Legogris | Hacker News Reader

> When the reward of being dishonest is (seemingly) greater than the risk, no person or company is accountable: The entire system is at fault.

This dynamic is a great factor in many overarching issues today. In politics, it's so easy to get stuck on ideology, ethics or morality. But in practice, it comes down to incentive structure. And carrot usually works better than tick, for several reasons.

Consider the problem of tax evasion in retail. Greece is imposing fines on those who conduct a large enough ratio of their transactions in cash[0]. Taiwan solved this more elegantly in 1951, IMO, with introducing a lottery with a number coming up on each receipt, thereby creating an incentive for consumers to ask for a receipt[1].

0: https://fortune.com/2019/12/16/greece-digital-economy-cashle...

1: https://en.wikipedia.org/wiki/Uniform_Invoice_lottery

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How about this:

1. Have a way for buyers to report when a seller is bribing them to fake reviews. If the report turns out to be genuine, give the buyer a small reward ($5/10).

2. Have Amazon occasionally pretend to bribe people to do fake reviews. If a user does the fake review, their account is banned for one month. If the user reports the fake review, they get the small reward.

Between the carrot of reporting fake reviews, and the stick of being banned for falling for the request, you'd "crowdsource" a lot of the issues.

“If the report turns out to be genuine”

This still requires the platform to detect _genuine_ transgressions which is very difficult.

> This still requires the platform to detect _genuine_ transgressions which is very difficult.

I had in mind situations where a seller contacts a buyer who has left a negative review, and offers free merchandise for changing the review. If it happens within Amazon's system, they should be able to verify it.

Obviously an attack you have to defend against is unscrupulous seller E posting fake review requests on Facebook (or wherever) "on behalf of" honest seller A, causing Amazon to ban / punish A in the rankings.

It also requires that the incentive for Amazon to go after fake reviews to be greater than their benefit from them plus the effort involved.

I'm no business expert, but I'd wager any "stick" method that bans consumer accounts is not going to be popular with boardroom types.

> Greece is imposing fines on those who conduct a large enough ratio of their transactions in cash

That's extremely unethical. But more importantly, doesn't it cause huge perverse incentives?

Correct me if I'm wrong, but the way this works is that you pretend the cash transactions didn't happen, and write the inventory off as lost or whatever. Or you buy the inventory for cash as well.

So if you have 50% cash and 50% card, you might report only 50% of the cash and reduce your reported gross income by 25%.

In other words, the legitimate but cash-eager businesses will have to pay fines. The frauds can boast about their 100% cashless ratio and pay no taxes as well as no fines.

They don't fine you if you do cash transactions. They fine you if you don't do enough card transactions.

Taiwan's solution is brilliant! Incentivizing the customer to ask for the receipt instead of putting the onus on the store who is incentivized to not book the sale at all.

I hope policymakers will consider creative ideas like that instead of punishing consumers who use cash (still legal tender, for now) to conduct business.

That is elegant! makes me optimistic about society.

Taiwan's solution is awesome! This reminds me of the Mumbai cops solution for honking

https://www.youtube.com/watch?v=q0eQS7VlzFs

The solution is simpler than that which is to remove high-denomination notes from circulation and provide all citizens with free bank accounts. Eventually, just move to cashless transactions entirely.

The bigger problem in countries like Greece though is that the tax burden is immense, for example the sales tax rate is 24%. This creates a huge incentive to avoid the tax. This windfall is then either wasted on corruption or spent on healthcare and pensions for the elderly - ie. not services that the taxpayer can immediately or personally access.

Sales tax, company tax, and flat income tax rates around 10%, with no payroll taxes, seem like a better and more sustainable way to go. Flat taxes in Eastern Europe have actually seen tax payments and compliance go up, even with lower and non-progressive rates.

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