Freakonomics chapter 1 summary essay

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Sometimes, goodness and the moral incentive that accompanies it is its own reward. Also the "best of the best" make far more money and losing a tournament greatly decreases their pay.

Analysis In Chapter 1, Levitt establishes the format he will continue to use for the duration of the book. In economics, if there is a problem with a good, service, or a marketplace then economists have the incentive to change it.

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They seek to moderate the playing field and provide economic and social incentives not to cheat, as was the case with the board of Chicago Public Schools and the cheating teachers. Like the Introduction, this chapter begins with a puzzle in need of a solution, creating a sense of suspense and, as the authors suggested in the Introduction, making economics more exciting! Continuing with the discussion of incentives, Levitt next examines the incentives that cause people to cheat, which he defines as getting more for less. One of the premises of Freakonomics is that we can understand a lot about society and humanity by studying seemingly trivial things like sumo wrestlers, bagel thieves, etc. This is different because it leaves the comsumer the business getting the bagels to pay for the bagels themselves. In his book, The Theory of Moral Sentiment, Smith posits that humans are innately honest; by default, they care about helping other people and making others happy. Economists view the world as both scientists and policymakers. Without any consequences for his actions, the shepherd wore his ring and used it to kill, rape, etc. Describe, in general terms, how sumo wrestling tournaments in Japan are arranged and how the rank of an individual sumo wrestler might change as a result of his performance at one of these tournaments. Using this cheating algorithm, they revealed evidence of teacher-cheating in over classrooms per year. Arn, Jackson. In order to catch cheating teachers in the Chicago public school system, investigators looked for repeated patterns of letter answers on students' answer sheets in classrooms that had experienced a dramatic spike in test scores from the previous year, a sign that the teacher had possibly been cheating by changing her students' answers before handing in the answer sheets. If at the end of a tournament a wrestler loses many of his matches he is booted out of the "best of the best" racking and forced to do the work of the "less than" wrestlers like washing, cleaning, etc.

Economics postulates that in his or her pursuits, a rational person will always seek to maximize utility, or get the most possible gain from a certain course of action. Since public schools with low test scores risked being shut down and teachers with low test scores can be passed over for promotions or even fired, many teachers had incentives to cheat and inflate their students' scores, whether by providing them with answers or even changing their answers after the students finished the test.

How does it relate to the study of economics?

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The cheating teachers were likely to be younger and less qualified; they were particularly likely to cheat after their incentives changed, such as when high-stakes testing was introduced.

Of course, many thinkers and economists take exactly the opposite point of view. Thus, even rational people are incentivized to cheat, just like these schoolteachers and sumo wrestlers.

How did Levitt construct a means of detecting evidence of cheating among Japanese sumo wrestlers?

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Another good way to estimate bribery in sumo matches is to look at what happens the next time the same and wrestler compete; i. It is highly unlikely that students would choose the same correct answers to hard questions, but not the same correct answers to easy questions or the same wrong answers to easy questions. Unfortunately, though, after this fine was instated, the number of late pickups only went up. This brings up a theory of how teachers cheat but it does not prove it. Before explaining why this happened, Levitt segues into an in-depth discussion of incentives. Posted by. How did Levitt construct a means of detecting evidence of cheating among Japanese sumo wrestlers? Active Themes The practice of cheating is a good way to understand incentives. In part, this is because the authors are taking an impartial, economic view of cheating, not a moral view. Unlike most other books, we do not discuss theory or SPSS, but link the two. Although company employees would occasionally eat bagels without paying for them, very few people would steal the collection boxes themselves. If something needs to get done you hit them where it counts, their wallets. These often have to do with reputation: the thought of others judging you positively or negatively for taking a certain course of action can be an extremely powerful motivator. In Japan, sumo wrestling is a highly prestigious sport: sumo wrestlers are big celebrities, with the most famous earning millions of dollars. The anti-smoking campaign put multiple incentives to smokers.

Duncan publicized news of the cheating study, hoping that the news would act as a warning to teachers next year. This chapter further breaks down incentives into three different categories.

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Therefore, the introduction of federal student testing creates a new economic incentive for teacher cheating. One might think that the prevalence of bagel theft is basically unpredictable, but in fact, bagel theft is subject to a wide array of environmental influences, including holidays and the weather. In part, this is because the authors are taking an impartial, economic view of cheating, not a moral view. An wrestler in the same position, however, would not have these strong confounding motives for turning down a bribe. Rankings are determined by a wrestler's performance in the elite tournaments held six times yearly, where a wrestler fights in fifteen bouts per tournament. This wrestler may have incentive to throw the match because of a bribe, a social incentive, or some other arrangement with the other wrestler. The theory of comparative advantage explains how people benefit from economic interdependence. It is possible though unlikely that the student did get harder questions right while he got the easier questions wrong. At least that is what they thought would happen.

For example, by fining a big company for polluting the environment, the government could incentivize the company to decrease its pollutions another negative incentive. Can you think of other examples of government regulations that were imposed to achieve one goal but have had unanticipated consequences?

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