Incentive compatibility is the compatibility of an economic rule or mechanism with the incentives of the individuals concerned. That non- incentive compatible rules are usually of limited use has important implications for the operation of government policy. For example, it is of little use for the government to ask individuals how much they value a good provided by the state, such as roads, and use this response as a basis for deciding how much to spend on roads, as all road users have an incentive to overstate their needs. Such a mechanism for determining expenditure on roads is not incentive compatible. Research Incentive Compatability
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Matt and Leela Probert
Abbreviations
Research Incentive Compatability
