WARNING: The one who is mad himself has an idea about madness
You gain reputation for doing either heroic or mad things. If you get enough of it you may get some special quests or items.
example: there is a kitten on a tree
heroic action: you climb on the tree and save the cat
mad action: You set the tree on fire and when the cat comes down and wants to escape, you catch it and cover it with honey just to see how the cat is chased by killer bees.
If you are heroic enough people give you the quest to defeat a dragon because they think you are strong and brave enough to succeed.
If you are mad enough people give you a completely insane quest just to get rid of you. Like you are asked to find the invisible pink unicorn at the other end of the rainbow on moon. And when you follow this quest you may find something more insane than you could ever imagine.
PS: If somebody reads this and thinks this is a good idea, you should really visit a doctor (not me!)