I began the chapter by asking myself what the book had already taught: is this to be based on some sort of incentive, be it moral, social, or economic? This was economic incentive for teachers to cheat because they could gain money for doing well or lose their job for poor testing. Its flat out disgusting to realize that for many of them, this is an idea that they get from their parents and that their parents approve of. According to Levitt they do. But most incentives have to be created artificially; this means that incentives are always changing. In my economics class, this book had gotten brought up and the class talked about it for a while. 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. In the process, the blood donor center reduced the moral benefit of donating blood, resulting in fewer donations.
It is very interesting to see how much incentives drive society and influence how decisions are made. Although the parents were rewarded escaped the fine for picking up their child on time, their intrinsic motivation was no longer driving them to escape the guilt of a late pick up, so in fact the fine provided justification for being late. Explain how the imposition of a fine for tardy parents at a day care center may have altered the motivations of these parents. The authors believed this plan failed because parents felt they were paying off their guilt and the fine was too low. He would drop off bagels to different offices and leave a basket for the employees to drop in the money for the bagel, a sort of honor system. Chapter Two uses the grisly example of the Ku Klux Klan and their gruesome domestic terrorism tactics that they used to promote bigotry and racism in America. After the implementation of the fee, many of the parents chose to be late and pay the fee, rather than changing their behaviors, and in fact more parents began to be late to pick up their kids.
I look forward to reading the rest of the book last week. While the 7-7 wrestlers won nearly 80 percent of those first, high-stakes bouts with 8-6 wrestlers, they only won 40 percent of the low-stakes rematches. Surely this must count as all three flavors of incentives: moral, social, and economic. How did it differ from most business models? Thus it is highly likely, based on the data, that sumo wrestling is a corrupt sport in which wrestlers regularly take bribes to throw matches. I think when we are able to understand how these incentives work we can see why people may make certain decisions that at first look may seem crazy or very risky, like teachers cheating scores or kids pushing drugs on the streets of Chicago. Why is this usually a difficult subject for economists and others to analyze? Terror, used as an incentive, is a fearsome weapon.
These types of incentives are how society attempts to mitigate crime. Economic incentives motivate people with the promise of money or goods. The reason a real estate agent does the things they do is for their own sake. David Duke, the infamous leader of the Ku Klux Klan, ran for public office on several occasions, but never succeeded. In order to analyze sumo wrestling, the authors begin by isolating some variables.
He was taking the first train trip of his life, leaving St. John Reed, yet he died when she was a year old. In actuality, however, 7-7- wrestlers defeat 8-6 wrestlers about 80 percent of the time. Levitt attributes Kennedy's success to his understanding of the power of information. In order to catch cheating teachers in the Chicago public school system, investigators looked for repeated patterns of letter answers on students' answer sheets in classrooms that had experienced a dramatic spike in test scores from the previous year, a sign that the teacher had possibly been cheating by changing her students' answers before handing in the answer sheets. One of his last wishes was for his wife, Mrs. Therefore, it would seem that the social and economic incentives for cheating in sumo wrestling outweigh the negative moral incentives of doing so.
If he has eight victories or better, his ranking rises, but if not, his ranking falls. Explain how Levitt devised a means of examining student test scores to uncover evidence of cheating teachers. Indeed, Lord Canterville himself, who was a man of the most punctilious honour, had felt it his duty to mention the fact to Mr. A government plan to fine smokers would be an economic incentive to reduce smoking. Next we looked at the high stakes testing in the Chicago Public School System.
The incentive based theory that Levitt and Dubner discuss is absolutely true. Police chiefs in this case, the principals likely wish to see more arrests and fewer prostitutes, but there is a conflict of interest with the beat cops agents. How did Paul Feldman set up his bagel business in the Washington, D. The final segment of the chapter discusses whether or not people take pains to outwardly appear non-discriminatory in certain social situations, and whether this lack of discrimination is sincere or just a charade. This allows economists to study how pervasive cheating on federal tests might be. Again, these themes are well known and studied in cognitive and social psychology as ways to conceptualize how people arrive at truth and understand the complex relationships we are exposed to.
Often, poorly planned incentives can have a rippling effect that can produce drastic and unforeseen consequences. I completely agree with you. Leaving children at daycare for just a few extra minutes does not really seem like it would be that significant, but it is. September 14, 2007 11:58am by For most of us, the athletes are what make sports interesting. I was not looking forward to being a contributing party to the creation of a drug dealer. This is a particularly subtle example of how incentives can conflict with one another.