Essay Freakonomics chapter 1 summary

688 Words Apr 27th, 2015 3 Pages
Freakonomics Chapter 1 Summary
In chapter one of Freakonomics, Stephen Dubner and Steven Levitt describe how when incentives are strong enough, many usually honest people from different walks of life will cheat in order to gain financially or climb the ladder in their careers. The authors define an incentive as “a means of urging people to do more of a good thing or less of a bad thing.” This chapter covers three varieties of incentives: Economic, Social and Moral. Economic incentives motivate people with the promise of money or goods. Social incentives motivate people to respond in a certain way because they care about how they will be viewed by others. Moral incentives motivate people on the basis of right and wrong. We look at four
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The next case study was on Sumo Wrestling matches in Japan. Sumo wrestling is huge in Japan and the ranking is everything to the sumo wrestlers. Highest ranked wrestlers are treated like royalty while those who don’t rank as high must tend to their superiors and do jobs that are less than desirable. The results of the data in this chapter shows that a wrestler very well might throw a match to help his opponent maintain his current ranking, when throwing the match does not hurt or help his current ranking. There was economic and social incentive for them to cheat. A wrestler would help another out with the promise of being helped out when they needed it. It was proven that the majority of sumo wrestlers do cheat at one point or another.
The last study was data collected by an entrepreneur named Paul Feldman who decided to start a bagel business in the Washington D.C. area. He would drop off bagels to different offices and leave a basket for the employees to drop in the money for the bagel, a sort of honor system. He kept track of the payments and started an accidental study on honesty. The data showed that smaller offices are more honest than larger ones. Also, someone’s mood could affect if they would pay or not. After reviewing his findings, Feldman believed that morale was a key factor in whether the employees were being honest. Evidently people are not above cheating, even
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