Term Paper
FREAKONOMICS
Gabriela Medina
Post University
Freakonomics is intended to challenge ones prior beliefs and the conventional wisdom of the reader. Conclusions derived from various investigations described throughout the book will often shock you. Some may even irritate your sensitivities. The authors, Steven D. Levitt an economist and Stephen J. Dubner a writer, do not argue that conventional wisdom is “always” wrong, but they do conclude that the conventional wisdom used as an explanation for many social issues is unexamined, unquestioned and often incorrect. Freakonomics provides you with real life examples of incentives and how they affect human behavior. It shows how everyday situations, purchases, and decisions affect the economy, and how humans are tempted to participate in different activities because of incentives. This book discusses the economy and how it is affected in the perspective of life. The authors provide you with statistics and evidence that they have collected to defend their statements. You will find the topics interesting and would never imagine the role they take in the economy. While reading you will hear about the “butterfly” effect and how an event can affect someone or something years down the line and have undesired or unexpected effects. While reading the chapter on “What Do Schoolteachers and Sumo Wrestlers Have in Common?” I could think of several examples that take place in countries like Argentina in their daily dealings with the corruption in law enforcement. It’s not that the policemen are bad people or that they don’t have morals, it is that the monetary incentive is strong enough that they prefer to “cheat” and profit more from corruption than what they would earn by their monthly wages which is zero to nothing in comparison. Within this chapter they explain how incentives sometimes lead to cheating. Incentives in business should be established wisely, in order for them to have the desired effect,
Gabriela Medina
Post University
Freakonomics is intended to challenge ones prior beliefs and the conventional wisdom of the reader. Conclusions derived from various investigations described throughout the book will often shock you. Some may even irritate your sensitivities. The authors, Steven D. Levitt an economist and Stephen J. Dubner a writer, do not argue that conventional wisdom is “always” wrong, but they do conclude that the conventional wisdom used as an explanation for many social issues is unexamined, unquestioned and often incorrect. Freakonomics provides you with real life examples of incentives and how they affect human behavior. It shows how everyday situations, purchases, and decisions affect the economy, and how humans are tempted to participate in different activities because of incentives. This book discusses the economy and how it is affected in the perspective of life. The authors provide you with statistics and evidence that they have collected to defend their statements. You will find the topics interesting and would never imagine the role they take in the economy. While reading you will hear about the “butterfly” effect and how an event can affect someone or something years down the line and have undesired or unexpected effects. While reading the chapter on “What Do Schoolteachers and Sumo Wrestlers Have in Common?” I could think of several examples that take place in countries like Argentina in their daily dealings with the corruption in law enforcement. It’s not that the policemen are bad people or that they don’t have morals, it is that the monetary incentive is strong enough that they prefer to “cheat” and profit more from corruption than what they would earn by their monthly wages which is zero to nothing in comparison. Within this chapter they explain how incentives sometimes lead to cheating. Incentives in business should be established wisely, in order for them to have the desired effect,
References: Johnson, Paul M., Dr. (1994-2005). Auburn University. A Glossary of Political Economy Terms. Retrieved from http://www.auburn.edu/~johnspm/gloss/externality Levitt, Steven D., Dubner, Stephen J. (2009). Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. ISBN: 978-0-06-073133-5 (pbk)