Freakonomics By Steven D. Levitt & Stephen J. Dubner is based on these fundamental ideas: Incentives, conventional wisdom, “Experts”-use their informational advantage Incentives are the cornerstone of modern life. And understanding them or, often, ferreting them out—is the key to solving just about any riddle, from violent crime to sports cheating to online dating. There are three basic incentives economic, moral and social. How do we profit and what incentives drive us to act unethical? The author describes the research he used to identify a number of Chicago public school teachers who helped their students cheat on standardized tests.
According to Levitt & Dubner “In 1996, the Chicago Public School System implemented high-stakes testing and the schools that received the lowest scores would be placed on probation or shut down. ”(23) would take all the test and change a few answers privately. Like many other professions teachers want to be the best. According to Levitt & Dubner People cheated more often during bad weather and around stressful holidays like Christmas, Thanksgiving and Valentine’s Day. “Free holidays” like Independence Day and President’s Day produced the opposite behavior.
I strongly believe that People will cheat and steal with the right incentives. The conventional wisdom is often wrong. Crime didn’t keep soaring in the 1990s, money alone doesn’t win elections, and—surprise—drinking eight glasses of water a day has never actually been shown to do a thing for your health. Conventional wisdom is often shoddily formed and devilishly difficult to see through, but it can be done… The massive crime drop in 1990s was believed to be an affect of conventual wisdom when in reality it had nothing to do with conventual wisdom but another factor played a huge role in the massive crime drop.
According to Levitt & Dubner “Norma McCorvey dramatically altered the course of events without intending to. All she wanted was an abortion”. (3) McCorvey knew she would be an unfit mother and was the defendant in the case an went to the U. S Supreme Court because in some states it is illegal to have an abortion. ” On January 22, 1973, the court ruled in her favor, allowing legalized abortion throughout the country. ”(4). Now u must be wondering what does this have to do with onventional wisdom, well since it was now legal to have an abortion more unfit mothers for what ever reason was having abortion because the were less kids there were less crimes how this relates if a person has a child and it is unwanted then the parent tends to no show as much love and guidance than that of a parent or parents who plan to have a child and is secure finically and and is ready to love and teacher there child. Contrary to conventional wisdom, the number of anti-black lynchings in America declined steadily and precipitously during the first half of the 20th century.
Lynching was an extremely uncommon cause of death among blacks by the 1960’s, which most people would believe to be a period of intense lynchings given the decade’s racial strife “Experts”—from criminologists to real-estate agents—use their informational advantage to serve their own agenda. However, they can be beat at their own game. And in the face of the Internet, their informational advantage is shrinking every day—as evidenced by, among other things, the falling price of coffins and life-insurance premiums.
A real-estate agent’s job would seem to persuade the homeowner to sell for less than he would like, at the same time letting potential buyers know that a house can be bought for less than its listing price. To be sure, they tell the buyer to bid low. The study of real-estate agents data reveals how agents convey information through the for-sale ads they write. According to Levitt & Dubner “A phrase like “well maintained,” for instance, is as full of meaning to an agent as the code phrase “Mr. Ayak” was to a member of the Ku Klux Klan; it means that a house is old but not quite falling down.
A savvy buyer will know this (or find out for himself once he sees the house), but to the sixty-five-year-old retiree who is selling his house, “well maintained” might sound like a compliment, which is just what the agent intends. ”(70). So why would real-estate agents do this well theres a simple explanation the house is on the market for 400k and they make a 18k commission and make $4500 cash in hand or wait 3 more weeks do a lot more work sell the house for $410,000 and make $4650 cash. All this can be avoided, internet enables information transfer so that people can know more stuff that was once held by “experts”.
Such “exposure” of information reduces the information imbalance, and causes the prices of experts’ service to collapse. Freakonomics has no one topic. It has many, it challenges you to think more and see there is a reason to why things happen or why people do what they do. Chapter one focus mainly on the study of incentives and how they are pursued. Chapter two focus on information and the way that individuals, organizations, and businesses often exploit their access to crucial information at the expense of others.