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 different case studies that show how these types of incentives can push people to cheat. The first case looks at ten day care centers in Israel. The centers started to fine the parents who were late picking up their children three dollars. For the weeks before the fine was added there was an average of eight late pick-ups per week. After the fine was implemented, the number of late pick-ups increased to an average of 20 per week. The day care center was using an economical incentive for the parents to get there on time to avoid the fine and that plan failed. The authors believed this plan failed because parents felt they were paying off their guilt and the fine was too low. Next we looked at the high stakes testing in the Chicago Public School System. The government orders high stakes testing as part of the No Child Left Behind law. Schools with low testing scores would be punished or shut down, and schools who did well were awarded. Teachers whose students tested badly could be fired while teachers whose students tested well would receive large bonuses. This was economic incentive for teachers to cheat because they could gain money for doing well or lose their job for poor testing. Levitt developed a computer algorithm to look...
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