Freakonomics Book Report
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 effects of incentives dominate the chapter; public school teachers in Chicago, sumo wrestling in Japan, and Paul Feldman’s bagel business.
In chapter 2 the author imposes on those who do not, the ways it can be misused, and the ways it can be abused. The first part of the chapter describes how the Ku Klux Klan first came into being and, how, over time, it was able to exert considerable influence over the lives of those it considered the “enemy,” e.g., blacks, Jews, Catholics. What the discussion also shows very clearly is how the acquisition and dissemination of information that had been known only to members of the Klan–secret coded greetings, the Klan’s organizational structure–took away much of the power the Klan had previously enjoyed. Once the “secret” was out, much of the membership was no longer willing to participate for fear of being exposed to the public.
In chapter 3 Levitt and Dubner quote from the economist and diplomat John Kenneth Galbraith, who asserts that social behavior is complex and “to comprehend its character is mentally tiring.” So, according to Galbraith, conventional wisdom must be simple, convenient, and comfortable and comforting, though not necessarily true. Levitt and Dubner cite...
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