Review of Freakonomics
This chapter's main idea is that the study of economics is the study of incentives. We find a differentiation between economic incentives, social incentives and moral incentives. Incentives are described in a funny way as "means of urging people to do more of a good thing or less of a bad thing", and in this chapter we find some examples public school teachers in Chicago, sumo wrestling in Japan, take care center in Israel and Paul Feldman's bagel business of how incentives drive people and most of the time the conventional wisdom turns to be "wrong" when incentives are in place.
I definitely agree with this, while reading this I could think of several examples that take place in Mexico's daily life, and this is a clever explanation for them: Policemen corruption. It is not that policemen are bad people or that they don't have morals, it is that the monetary incentive is strong enough so that they prefer to "cheat" and profit more from corruption than what they would earn by their monthly wage.
Within this discussion it is explained that incentives sometimes lead to cheating, because "something worth having is something worth cheating for". I think the incentives placed in daily life those that we can control, let's say, in our business should be established wisely, in order ...
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...ifferent, children names are predictors of their success/failure because of its connection with his parents, and the cycle that names do through low to high socioeconomic classes. All these trends brought up by economic analysis turn interesting specially when they are supported by statistical data but they are also examined through cause/effect like the raising question: is black culture a merely reflection of the economic gap between white and black people or has it caused the gap between them?
From my point of view this findings are surprising and hard to believe but they make sense. Though I think the author gets radical about this regarding some post he has made on his website's blog about middle name Wayne characterizing criminals . I guess we can find so much strange coincidences but it is important to determine the causes of them, if there are consistent.
Summary In chapter one of Freakonomics, the beginning portion of the chapter discusses information and the connection it shares with the Ku Klux Klan and real-estate agents. The Ku Klux Klan was founded right after the Civil War, in order to persecute and subdue the slaves that were newly freed. The popularity of the Klan increased in the early 20th century, around the time of World War I. In the late 19th century, the Klan had only discriminated, persecuted, and subdued Blacks, but in the 20th century they did these things to Blacks, Jews, and Gypsies.
Written by Steven D. Levitt and Stephen J. Dubner, Freakonomics is built upon three major philosophies: incentives are the fundamentals of life, experts on a subject use their knowledge as an advantage to serve their own wellbeing, and orthodox wisdom is wrong most of the time. This book goes into detail to explain the mindsets of humans, from school teachers to sumo wrestlers, through statistics. Levitt and Dubner claim that when the data is closely examined it can relate to more concepts than originally hypothesized. The style of this informative piece is very precise yet, at the same time, very concise and to the point. The tone carried throughout the book is informative and knowledgeable. The authors use distinct tactics to get points across
I would propose that the more wins a sumo wrestler obtains, the more money he wins and the higher he is ranked. This way, the more matches sumo wrestlers win, the more they are rewarded. Providing this positive incentive of being rewarded more money and a higher ranking for making every match count; no sumo wrestlers will want to simply hand away matches to their competition because it now has a negative outcome on them. Levitt uses crime as another example in Chapter 4 to examine incentive schemes and why more people don’t commit crimes. This is because of the risks or economic, social, and moral punishments associated with the act of committing a crime. So, by implementing rewards and making the punishments more severe for suspicions of cheating, sumo wrestlers will be less likely to cheat. It should be known that if a competitor is discovered to be cheating, their reputation as a wrestler will be ruined, they will no longer be able to compete, and they will be charged a large fine. By employing all parts of the spectrum, economic, social, and moral punishments, sumo wrestlers will find it much more difficult to defy the
Conventional wisdom would argue that all crack cocaine dealers make an obscene amount of money. Despite the danger of dealing drugs in Chicago (or anywhere for that matter), many people still do it. Lower paying jobs generally have a large supply pool, and higher paying jobs generally have a smaller supply pool. Realizing that these crack dealing organizations and gangs operate like a normal business flies in the face of the conventional wisdom that crack dealers are all rich. The American idea of working hard and eventually becoming successful is what the lower level dealers believe in and what makes them stay in that horrible job. There is a multitude of lower level jobs to fill, but there is a significantly smaller number of higher paying jobs available. The people in charge would like things to stay as
This paper aims to present the book review of ‘Freakonomics: A Rogue Economist Explores the Hidden Side of Everything’ along with the main arguments, course applications and personal opinions.
Incentives create a personal connection between the donator and what they are giving to, making it more likely that they will donate. Peter Singer, a moral philosopher, uses the example of a drowning child. Pretend that you are taking a walk and see a young child, who clearly doesn’t know how to swim, trying to
Chapter four of Freakonomics starts off by giving background information of the dictator in Romania. Nicolae Ceausescu was the dictator of Romania that made abortion illegal. With this new abortion law Ceausescu wanted to strengthen Romania’s population. Before the abortion law, there were four abortions to every live birth (Levitt and Dubner, 2009). However, women who already had four children and were apart of the communist party were exempt from this law. Within one year of this act the population had doubled. Studies had shown that people who were born after the abortion law would do worse in school, in work, and would sometimes be more likely to become
Levitt states that the root of Economics is the study of incentives (Levitt 20) since scarcity causes Social-Darwinism by competition for resources that people want and need. But rather than presenting cases of incentives that serve their intend purposes Levitt displays cases in which incentives have failed and backfired. One example of such a case is when day-care centers in Haifa, Israel enacted a fine on parents who picked up their children late. They hope was to decrease the numbers of late parents but average of late parents actually doubled (Levitt 19-20). The reason was plain to see, the incentive was not big enough. The fine was only three dollars, less than that of a morning cup of coffee.
The Mexican government is known to be corrupt- reinforcement coming from the people interviewed in the film. Various federalist and centralist politicians in the Mexican history have been known to bribe for votes, made apparent by the film to occur even at the local level with municipal presidents. Contributing to the push factor to the U.S., corrupt government bodies push the natives towards leaving by providing no benefits that were promised, such as “lotteries” for those who fill out documentation proving that welfare was properly disbursed when no welfare was given. It was said that the Mexican people depend more on their relatives in the United States than they do on the government (e.g. money sent back to fund patron saints and festivals or just for family support). This is an amazing example given by the film about exploitation- a common occurrence in the political history of
"Anybody living in the United States in the early 1990s and paying even a whisper of attention to the nightly news or a daily paper could be forgiven for having been scared out of his skin... The culprit was crime. It had been rising relentlessly - a graph plotting the crime rate in any American city over recent decades looked like a ski slope in profile... Death by gunfire, intentional and otherwise, had become commonplace, So too had carjacking and crack dealing, robbery, and rape. Violent crime was a gruesome and constant companion...
People tend to blindly cheat to get what they want, and go about it as if it were normal. People don’t usually want to work for things if they can get it the easy way. In Stephen L. Carter’s article “The Rules about Rules”, Carter explains why Americans choose to cheat and how they don’t necessarily know right from wrong. Carter’s interpretation is accurate people do lack integrity due to having low self-esteem, and not having the courage to be different and separating themselves from the crowd.
Sometimes people remain driven to do something because of external reward, or the by the avoidance of an objectionable consequence, as when one obeys the permitted speed limit to avoid a costly speeding ticket. When the motivation leads to an outcome that is outside of the self, it is called extrinsic motivation. In extrinsic motivation, a person performs an action because it leads to an outcome that is separate from the person (Ryan & Deci, 2000). For instance, giving a student money for every A grade, proffering a bonus to a salesman for the most contracts signed, or tipping a stylist for a good haircut. The student, salesman, and hairdresser remain motivated to work for the external extrinsic rewards. In contrast, intrinsic motivation is the form of motivation in which an individual implements an action because the act itself is enjoyable, satisfying, interesting, or rewarding in some internal
Freakonomics has been an incredibly interesting read and opens up with, what appears to the reader to be, a writing style that somehow personifies the text in a way that only the book itself can articulate. The authors, Steven D. Levitt and Stephen J. Dubner, do an amazing job describing basic economic concepts and rules using intriguing and nontypical examples all while entertaining facts and figures that leave the reader with a dropped jaw. The economist, Levitt, received his bachelors degree in economics from Harvard University, his Ph.D. from M.I.T., and has been a professor of economics at the Chicago School of Law since 1997. On the opposite side of the cover, the award-winning writer, journalist, TV and radio personality, Dubner, has
Management spends a huge amount of time to design incentive systems and schemes to motivate their workers and to ensure they work in their best possible manner. Motivating workers by giving them decent pay helps in winning employees heart to make the work done efficiently, significantly and effectively. The most effective way to motivate people to work productively is through individual incentive compensation (Pfeffer, 1998). An attraction of getting more is a powerful incentive to people for high performance. While most people agree that money plays a major role in motivating people, in organizations there is a widespread belief that money may also have some undesirable effects on morale.
Cheating is wrong and avoidable, but it still occurs. It may not be evil, but even as a lesser good, it still does not make it better. That’s why a world without ‘evil’ would not be the best of all, it wouldn’t be achievable. A world that comprises of less evil and more good is an attempt for which individuals should strive. A lesser good may be momentary but it seems as though it is always present.