The World Of Economy, By Steven Levitt And Stephen Dubner

One of the primary fundamental ideas expressed in Freakanomic is that “incentives are the cornerstone of modern life”. An incentive is persuading people to do more good than bad. Levitt defines three types of incentives, social, economic, and moral. The authors state that individuals including sumo wrestlers and teachers, will behave unprofessionally to meet their needs and desires, if the incentives are good enough. A schoolteacher’s incentive to cheat has increased due to high-stakes testing. While a sumo wrestler’s chance of cheating will increase when he is on the bubble since the outcome of his matches will affect every aspect of his life. In order to determine if these incentives to cheat exist, specific data is viewed. For the

Based on Paul Feldman’s findings, the authors of Freakonomics argue that a person, who is faced with an efficient way to cheat, will not necessarily choose to. The data involved in Feldman’s accidental bagel study proves that not all humans are corrupt. However,

1. The first chapter in the book is about the market and its inner workings. The book briefly explains the idea of supply and demand, in which the price of a certain good or service will reach the point where all the demand is equivalent to the supply. However, the value of something is not determined by its necessity, but its desire within society, as seen by the difference in cost between a diamond and life giving water. Markets operate as they do because people try to maximize the amount of utility for themselves. Nevertheless, a strict rationalism model cannot be used for predicting all the occurrences of a market because of the ever changing behavior of people; thus economists must take precautions against

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

The author Steven Levitt studied economics at Harvard University and MIT. He is primarily known for his work in the field of crime. The title Freakonomics means a study of economics based on the principles of incentives. The title is related to the book since he emphasizes how incentives drive and affect people’s actions. Although this book does not have a single theme, the main focus of the book is a new way of interpreting the world using economic tools. He explores incentives, information asymmetry, conventional wisdom, crime and abortion, and parenting throughout the six chapters of the book.

The bizarre economy that we live in has affected us in many ways than our simple mind can fathom. After World War II there was massive push in innovation. Human were gifted with inventions like the Airplane, color T.V., polyvinyl cups, and precooked dinners. Nevertheless, these “gifts” came at an enormous cost. That cost was pushed onto the environment and people living in that environment. “The Market Economy” by Marge Piercy illustrates the movement in American aimed at bring attention to a global problem as well as an effort to save the planet along with the people living on it.

However, Levitt, in the introduction of Freakonomics, declares economics to be a simple “science of measurement” depicting reality compared to and distinct from morality considered as ideals or utopias of that reality. In my opinion this statement underestimates the significance of economic theory in today’s world, is generalised and insufficient. Economic theory and measurements have strong implications, e.g. for the perception of national welfare, and consequently policies and regulations of a country which attributes to economics much more command than a mere supply of information. Furthermore, reality can hardly be described only by numbers since feelings and morality as foundations of our values and beliefs take a large and decisive part in life and our decisions, but can hardly be measured as such. Even the economic system of exchange is not only based on efficiency and quantitative terms but indeed on moral-based conduct as well. Overall, I consider explaining the world by mere measurements and a collection of factual data too simplistic.

Cheats, as said by Lipsyte, have plastered society at many levels. They can be found in the economic world pumping and dumping stocks for personal benefit, and playfully asks the reader if they would like a “predatory loan”. He goes on to proving his point that cheats are everywhere by pulling examples such as “people who sweet-talk customer service to bend the rules for them”, to simple cheating schemes in well played games such as Go Fish and Monopoly. Lipsyte has a hate for cheats which is made clear to the reader in the first three words of the article; however, in the fourth paragraph he explains his hate for the cheating class by saying that he “fears from getting caught” and almost implies to the reader that he is envious of their ability to mask or suppress their fear of getting caught, unlike himself. Lipsyte says this because he shows how the cheats win in the six and seventh paragraphs by saying how capitalism in

In chapter 1, Levitt and Dubner describe how many people in different cultures and walks of life, which are otherwise inclined to be honest, find subtle ways of cheating to advance their position or increase monetary awards when incentives are strong enough. The authors define an incentive as “a means of urging people to do more of a good thing or less of a bad thing,” and identify three varieties of incentives. Economic incentives are those, which a person responds to in the marketplace. Social incentives motivate people to respond in a certain way because they care or are worried about how they will be viewed by others. Moral incentives appeal to a person’s sense of right versus wrong. Three case studies of the

In The Undoing Project, Michael Lewis investigates behavioral economics and common misconceptions regarding the human brain and its ability to rationalize. This text dives into the deeper questions of why it is that people think the way they do despite the illogicality of their argument and how humans come about thinking a certain way. Though the author certainly addresses the arguments of both Kahneman and Tversky, it is important to note that Lewis also recognizes the arguments of society— those which are esteemed above the less popular conceptions. Kahneman and Tversky are two men who, though they lived different lives and have distinct ways of forming their predictions, both share their same views of the human’s subconscious, emotionally

In the book “All Money in the World” by Laura Vanderkam discusses about ways that people get and spend money in their lives and the relative between money and happiness. Each title, the author shows us different ways to use and earn money like getting, spending and sharing. But in chapter 3, “Rethink Retirement” of getting, Laura Vanderkam shows the creative way to approach retirement. There are three of the ways that the author suggests people can rethink and plan for retirement such as saving, making extra, and using time efficiently.

In this article, Drevitch insists that economic incentive can change people’s behavior by putting aside their morality for “financial calculation.” This type of behavior is called extrinsic motivation or referred to as “crowding out” and it is a powerful social reaction that’s been influenced by society. Based on

In Alexander Kern’s “Emerson and Economics,” Kern draws attention to the economical aspects found in Ralph Waldo Emerson’s texts. Specifically, Kern discusses the lack of attention that Emerson’s economical notions receive. Emerson is not associated with being an economist writer, but Kern draws attention to how “he so frequently touched the subject than an understanding of his economic ideas is a prerequisite to the evaluation of his entire thought on any relative or absolute scale” (Kern 678). Kern’s theory that readers must extract the economics out of Emerson in order to comprehend his texts is extremely useful because it sheds insight on the difficult problem of viewing Emerson as an economist, yet he views Emerson as a moral

After reading Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt and Stephen J. Dubner, it opened my eyes to the most interesting approach to the world. The book name in itself is an odd and unique title. It defines Steven Levitt’s irregular approach to the world of economics and makes you “forget your image of an economist as a crusty professor worried about fluctuating interest rates”, says Publishers Weekly. Steven Levitt focuses his attention on relevant everyday life situations that truly are world issues. The purpose of writing Freakonomics is to make the reader aware and convinced that there is a hidden but obvious side to everything, if you just dig deep enough. Throughout the book, Levitt and Dubner make it clear that economics is a “set of tools, as opposed to a subject of matter” to explore any issue, despite if it is quite unusual. The authors do not single out a certain group of people, but it strongly appeals to young adults. The book talks about education, raising children, and buying homes which are all subjects that apply to young adults’ lives. The authors portray an attitude that is an objective tone which appeals to a younger audience because it is seemingly practical and neutral, but also light hearted and amusing. Freakonomics is meant to be fun and captivating rather than strictly boring facts and statements, which is why it draws in younger adults as well as older adults too. Overall, I have found this book to

If we had unlimited resources and scarcity didn’t exist, economics would still study behaviour; and how to continue to satiate human wants (Sloman, Norris & Garrat 2014, p.5).