Perceiving The Actual World Like An Economist

2386 Words Oct 19th, 2016 10 Pages
Perceiving the Actual World Like an Economist Through out the entire book Freakonomics, Levitt and Dubner, emphasize how people are constantly responding to incentives, and how these incentives motivate and affect people’s decision making in their daily lives. The authors of this book talk about economics from a different perspective, and they do it by relating unusual and unasked questions to the field of economics. Levitt and Dubner define an incentive as the “means of urging people to do more of a good thing and less of a bad thing” (Levitt and Dubner 17). These incentives are usually what drive people to get what they want or need especially when resources are scarce and others want the same things. In this book, the authors define three types of incentives – economic, social, and moral – which are measured by people’s responses (Levitt and Dubner). From childhood, humans are constantly responding to incentives and learning from them. In Chapter 1, Levitt and Dubner explain some of those incentives by presenting a study based on 10 day-care centers in Israel. The study focused on the parents’ responses after the day-care centers announced a $3 fine for each time they picked up their kids 10 minutes later than the stated policy. The $3 fine caused the opposite effect that the managers of the day-care centers wanted: instead of reducing the number of tardy parents, it caused an increase of the number of late pickups. The reason for the increase of tardiness pickups was…
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