I don't think we need incentives. This is a game for people which like and enjoy writing stories. The writing is part of the fun of the game, if someone doesn't like to write stories can play another game and freely read what ppl in this game wrote. Simple as that.
Also it would be hard to 1) give ingame incentives (what do we do, we autotax ourselves and send money to the good writer? what's the thematic reason of that?), and 2) decide which writes the best - we all have different tastes regard of writing styles, form, etc. I.e. in the MA game all the stories are good and enjoyable and the ones I personally prefer are of Caelum's and T'ien Ch'i, but other people may prefer different styles and I think it wouldn't be fair to decide on majority
