The book Freakonomics by Steven D. Levitt and Stephen J. Dubner uses a number of specific examples to demonstrate the idea that incentive shape society. Although the basis of their argument is generally true, how they present their position on each question throughout the book ends up weaken their point.…
In this quote Pink cites a behavioral science textbook to prove his claim, “People use rewards to gain the benefit of increasing another person’s motivation and behavior, but in so doing, they often incur the unintentional and hidden cost of undermining that person’s intrinsic motivation toward the activity” (Pink 37). The science textbook explains that people often think others are motivated by rewards, but in the end the intrinsic drive always prevails and counteracts with that notion. Pink also states that, “Over and over again they discovered that extrinsic rewards—in particular, contingent, expected, “if-then” rewards—snuffed out the third drive” (Pink 37). This proves that the idea of expected rewards/punishments brings out the intrinsic motivation in people, and makes the activity seem more like a job, and less of an…
“An incentive is simply a means of urging people to do more of a good thing and less of a bad thing.” This quote from Freakonomics by Steven D. Levitt and Stephen J. Dubner explains why incentives are used in modern society. They are present to motivate someone to make a decision, whether it be a positive or negative one. Many times the average person thinks of an incentive as a term they are not familiar with, or that they don’t use on a daily basis. However, people everywhere use incentives on a daily basis to get what they want, whether they realize it or not.…
Levitt also states that teachers cheat due to the incentive of making more money in the form of performance bonuses. The author also contends that sumo wrestlers throw matches since they are most likely being bribed and there are no negative outcomes to losing that round. Also in the book Freakonomics, it states that parents pick up their children later than they have before from a daycare due to a fine for late pick-ups was put into place and they no longer feel guilty about leaving their child a little later now that they are paying for the extra care. Every single one of these actions are done because of some form of incentive, whether it be a moral incentive, economic incentive, or a social…
In chapter two, Wheelan focuses on incentives. He states that “Good policy uses incentives to channel behavior toward some desired outcome” (Wheelan 39). In the simplest terms possible, he means that in a capitalistic society, looking out for a person’s interests is the best way to manipulate that person to get the desired result. In the market, companies consider the consumer’s incentive to promote sales while individuals consider their own incentive to make decisions. Wheelan provides an example of protecting the black rhino because tourists will pay to see them. Otherwise, hunters kill the rhinos for their horn, as it is highly in demand, and very rare and expensive. Similarly, in order to get people to buy more electric cars…
To fully appreciate and understand a nudge, Thaler and Sunstein also introduce the concept of libertarian paternalism. The libertarian portion of their strategy lies in the straightforward insistence that, in general, people should be free to do what they like and to opt out of undesirable arrangements if they want to do so. They use the term libertarian to modify the word paternalism so that libertarian paternalism together means liberty-preserving. The paternalistic portion of their strategy lies in the claim that it is legitimate for choice architects to try to influence people’s behavior in order to make their lives longer, healthier, and better (Thaler & Sunstein, 5). What they are trying to argue is for self-conscious efforts, by people in the private and government sectors, to maneuver people’s choices in directions that will improve their lives. As choice architects, we have the opportunity to nude people toward what is better for them, this is libertarian paternalism. A choice architect can be anyone who chooses to take on the task of improving a situation for the good of society, but ultimately allowing others to make that improvement, of course with guidance and complete freedom. The choice architect will present choices and frame them in a way that will affect the decisions made. For example; Winn-Dixie offers a fuel perks reward program. For every $50 spent at the grocery store a customer will receive $0.10 off a gallon of gas. If the customer wishes to save on fuel costs and take advantage of the fuel perks program, they will be nudged into purchasing gas at specific gas stations as only a select few stations participate in the loyalty…
Steven Johnson once said, “If you look at history, innovation doesn't come just from giving people incentives; it comes from creating environments where their ideas can connect”. In the book, Freakonomics, by Steven D. Levitt and Stephen J. Dinner, Levitt explains that incentives can change one person's perspective on a situation and motivate them to do something they have not done before. People use incentives to steer others to do something in their favor. Incentives can be against you because they can change your moral incentives to twist a system into their own favor, which involves cheating.…
People watch, listen and read thus they learn indirectly to do those things that have positive consequences for others and they do not do things that get them in trouble. For example Nurse Ratched encourages Billy to start the therapy. She tells him that he will receive a tangible reward if he starts the therapy. This is an example of positive reinforcement because he knows that starting the therapy has positive consequences but when he is offered a reward it is easier to make him do it. In addition to that positive reinforcement makes people more volunteer to do something because they are going to have a reward at the end of the work. It is easy to see making people do something by informational influence is better than rewarding because when people are believed in something that is true they work or do it more efficiently than a rewarding work. But positive reinforcements are very effective to make people conform for a short time and thus this makes people conform but not believed in the importance of…
Common? This chapter’s main idea is that the study of economics is the study of incentives. We find a differentiation between economic incentives, social incentives and moral incentives. Incentives are described in a funny way as “means of urging people to do more of a good thing or less of a bad thing”, and in this chapter we find some examples –public school…
People have to face so many problems nowadays, and there are also many solutions for people to choose. But not all solutions work well in some situations. Therefore, in the book “Think Like a Freak”, S. Levitt and S.Dubner taught readers a lot of specific ways to solve the problem. According to the authors “Think Like a Freak”: “Understanding the incentives of all the players in a given scenario is a fundamental step in solving any problem”. Sometimes, the incentives don’t really work well. However, there are three situation that show different types of incentives, which is herd-mentality, moral, and social, work well and encourage people to do something good.…
Dave Pink’s Ted Talk reminded me of Ivan Pavlov’s conditional reflex theory; I believe sometimes in order to get a person motivated to do something, an incentive must be presented. We learn at a young age to have extrinsic motivation (if you did chores, you would get an allowance; if you got A’s in school, we would get rewarded; and so on and so forth). Growing up, I was never motivated by intrinsic motivation, I wasn’t personally rewarded by doing chores; I was motivated by the allowance. While in the military, my division was extrinsically motivated; we worked harder and faster to get off of work sooner than other divisions. We knew that once we completed the work, we would be off of work.…
4. How do incentives change people's behaviors? Incentives change people’s behavior by if someone says today we’ll drop taxes then several people would want to buy it because of no taxes, and if they were to raise the price of cigarette’s then people would not want to pay more for it.…
When writing a book or rather developing any argument, the only way you can convince someone of something is by making them believe in what you believe. Otherwise they will refuse to change, and you have wasted your efforts. An additional argument can be made about his claim on incentives. The idea seems logical, but it lacks statistical validity. Within the book Levitt has some unique views. However he does not offer the strongest claim, and could use some improvements. Whether it be arguing the effects of abortion or the way incentives motivate people. His book is written sloppy. People don’t buy into…
Should humans receive incentives for charitable acts? This question has been controversial over the last few years. Many people have seen an issue with this, believing that receiving incentives could send a morally wrong message but is that the case for everyone? I believe that wrongdoings sends a morally wrong message and not helping out the less fortunate is as much as a wrongdoing as not helping your fellow brethren. Helping others is good for one's own soul and others as well; it gives us a sense of hope and belonging. Whether it's to fulfill one's own selfish needs or to truly help out others; the motive doesn't matter because the outcome is always the same. People should be for receiving incentives because the gains outweigh the losses.…
Lea, S. E. G., & Webley, P. (2006). Money as a tool, money as drug: The biological psychology of a strong incentive. Behavioral and Brain Sciences, 29, 161-209.…