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In: Business and Management

Submitted By Shareen21
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What is Freakonomics? Freakonomics is an interesting book that evokes a thoughtful and provocative analysis of human motivation and modern living. It shows you a common world through a totally different pair of lens. The author uses the raw data of economics to ask imaginative questions while it forces the reader to think cleverly and divertingly of the answers. His approach to economics was done in a very unconventional way- as a smart, curious explorer parallel to Christopher Columbus when he discovered the Americas.

There is not one common theme in Freakonomics, instead the book is structured around four essential ideas: incentives are the basis of modern life, conventional wisdom is often wrong, dramatic effects often have distant (even subtle) causes, and experts use their information advantage to serve their own interests. Each consequent chapter is titled with an intriguing question, such as, “what do school teachers and sumo wrestlers have in common” and then answers are provided based on Levitt’s economic research and analysis.

One of the primary points emphasized in Freakonomics is that economics is essentially the study of incentives; why people behave in certain ways and how they benefit from the things that they do. The authors explain that there are mainly three varieties of incentives that motivate human decision-making: moral, financial, and social. When people make decisions based on moral incentives they are doing what they feel is “the right thing to do”. Financial incentives exist when decisions are made based on money, economic gain, and/or some other sort of material reward. Lastly, people make decisions based on social incentives, which exist because of societal or group norms and expectations.

The authors claim that when incentives are high enough, even naturally ethical people will behave unethically to get what they want.…...

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