Salvor's Contract

Salvor’s Contract is an economic principle suggesting that when a government or entity has a financial interest in promoting moral or social well-being, it can sometimes create incentives that lead to unintended negative outcomes. Essentially, it highlights how policies intended to encourage good behavior or prevent harm might inadvertently cause the opposite effect if not carefully designed. This concept underscores the importance of aligning incentives with desired outcomes to avoid strategies that backfire, emphasizing that well-meaning actions must be carefully structured to ensure they promote the intended societal benefits.