Two caveman go for a walk, one gets bitten by a snake then dies a few hours later. The economists shifted the moral incentive to an economic one: what used to be a generous, philanthropic act that made people feel good about themselves now became a painful and uncomfortable way to make a few bucks. Government officials, criminologists, and sociologists alike believed that the country was headed for “deepest chaos” because of the rise of superpredators.
In a nutshell, parents were highly educated and successful are more likely to have successful children regardless of their personalities or individual traits. People in positions of power – parents, teachers, bosses, politicians – are setting up incentives that encourage people to do more ‘good’ things and less ‘bad’ things.
#11 Unseen Actions Can Have Strange Consequences Arguably the most critical story in the book is that of Roe v. Wade and its consequences on the crime rate in the United States.
We need to consider that the agent would save money on commission. Freakonomics is one of the best books on human psychology I’ve ever read. Premium plans, Connect your favorite apps to HubSpot. Freakonomics Review.
I decided to pick one lesson from each sector, so you’ll get a good idea of what the book’s overall message is. Written by Stephen Levitt, and economist, and Steven Dubner, and journalist, Freakonomics revels ‘the hidden side of everything’.
Those few who do are paid extraordinarily large salaries.
Next, the economists decided to remove the fine because it clearly didn’t work, but it was too late – late pickups didn’t drop back to pre-fine levels, because parents had already absolved themselves of the ‘right thing’ mindset and late pickups were now expected. By these numbers, swimming pools are 90 to 100 times more dangerous to children than guns. #4 Social Incentives This next type of incentive is also incredibly common, although people don’t think about them nearly as clearly because of their often hidden nature. But actually, successful candidates could cut their budget in half and lose only 1% of voters (and vice versa). In a capitalist society, intense competition will drive prices down. Three kinds of incentives dominate your life. Most people don’t realize that economics can be a useful tool for understanding the way the world works, even in fields far removed from traditional economics.
Similar dynamics exist in music, sports and entertainment.
We all think whoever spends the most, gets the most votes. Maybe he’s made a commitment to himself to improve his selling skills and double his sales that month, and this is the last car he needs. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. Maybe he’s made a promise to his wife to sell enough cars to be able to afford daycare for his newborn son. Real estate agents also have an informational advantage over their clients, and they often use this to their advantage, selling houses for less than they are worth so that they can close a deal quickly because they have less to gain from a higher sale than the sellers do. We mix up correlation and causation all of the time. Ridiculous!
A 3 Minute Summary of the 15 Core Lessons #1 Put Away Morality and Ethics However, the agent’s incentives don’t align, One might assume that real estate agents will look out for their clients’ interests, both because of their financial motives and because they’re nice people. Well, some simple math reveals that it’s often better for the agent to abuse that she knows more than you, and get you to sell quickly.
When abortions rose in prevalence, kids in low-income environments were no longer born with the same regularity. This passage establishes one of the most important points in the book: in order to understand large, complicated social phenomena, we must sometimes look to small, seemingly trivial events and people.
This book, the authors claim, will use the techniques borrowed from economics and statistics to analyze the world and reach some surprising conclusions, like the ones they’ve discussed in the introduction so far. In Freakonomics we read about an Israeli economists who studied how they could reduce the number of parents that picked their kids up late from day care. The five rules that the authors list here can seem counterintuitive, because they challenge the way that people may be used to thinking about the world.
It is nearly impossible to learn anything without it.”, “Social scientists sometimes talk about the concept of “identity”. This drives wages down. In 2007, a study measured the relative ratio of the length of index fingers compared to ring fingers in high school students. The original text plus a side-by-side modern translation of. SuperFreakonomics book.
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