I've heard people talk about this book before. The impression I was given was that it is a non-traditional view on economics. So far, I can certainly tell that it was written by economists. With all three of the examples given in chapter 1, the means by which the points were proven is statistics; an economist's favorite tool. Yes, an effective argument was given by the authors but it was done quantitatively (ahh, the cold language of economics). I wouldn't mind seeing at least some emotion in this!
Now on to the material (at least my interpretation of it) . What are the authors trying to say in this chapter? They're obviously laying the groundwork for the rest of the book: people are incentive-driven. Ultimately that means that humans will hold interest in something only if they can get something good out of it. Whether you like it or not, that's true.
The non-traditional aspect comes in with the way this point was made. No matter what, in order to gain an incentive, there will always be those who will lie (teachers), cheat (sumos) and steal (bagel-eaters) to get it. I was surprised to see just how common cheating is in sumo wrestling and test giving in Chicago. I was not surprised by the bagel example. There is always dishonesty in business. I would have expected more stealing to happen than what was recorded. Wasn't it interesting to see that the most common theives at that three-floor place were in the leadership positions? What does thay say about incentives and rewards in the business world? I guess the economist authors are actual writers as well!
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4 comments:
Dishonesty in business is rampant. I was not surprised to hear that higher managers are more dishonest and cheaper than the "underlings." I think the further you go the more pressure gets put on you and as result you becomemore numb to the world around you. Bagels and paying for the bagel isn't as important because it doesn't specifically help you or directly affect your world, which shows how self centered managers have become. This is a major problem within the United States. Managers aren't effective because the United States only focuses on the short term results a opposed to the long term, which pushes upper level management into corrupt practices more quickly.
I always believed that creating economic incentives for school teachers was simply playing with fire. First off teachers aren't paid that well to begin with so the cost/benefit is high. Secondly it seemed fairly easy for a teacher to distort the test scores and if you were'nt an idiot get away with it. In the end I think all realized that incentives for teachers was not the answer.
Just like you said in the middle of this blog, I believe that a big part of the framework for this book is the idea that people are incentive driven. By no means am I Mother Teresa, but I don't think that all people are only driven by what they can get out of it. Call it extreme optimism, but I do believe there are selfless people that are intrinsically motivated.
This book definitely takes economics and uses economic theories to explain issues that many people have never thought of before.
Incentives definitely drive people. And, yes, many people won't do something that does not earn them something in return. However, I do feel that there are some people out there that believe in giving without receiving much in return. Where else would charity come from?
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