Freakonomics Flashcards

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Questions and Answers

What is a moral incentive?

How a person behaves in a particular way because they believe that is the correct way or the admirable thing to do.

What is a social incentive?

How a person behaves due to wanting to feel part of a group, being approved by society.

What is an economic incentive?

Monetary and material rewards and punishments that drive us to make certain decisions.

What is an incentive?

A thing that motivates or encourages one to do something. Signup and view all the answers

What is a conflicting incentive?

Two incentives that contradict each other which can lead to bad behavior. Signup and view all the answers

Why do people cheat?

To gain more while putting in less work, maximizing marginal utility. Signup and view all the answers

Explain the incentives explored in chapter one (sumo wrestlers, teachers in Chicago and paying for bagels).

Teachers cheating due to economic incentives; sumo wrestlers motivated by moral, social, and economic incentives; bagels related to moral and economic motivations. Signup and view all the answers

Explain how the imposition of a fine for tardy parents at a daycare may have altered the motivations of parents.

The moral incentive was replaced by an economic incentive, allowing parents to pay away guilt. Signup and view all the answers

How has the requirement to administer standardized tests to grade school students had unintended consequences?

Teachers would cheat for their own benefit, compromising the education of children. Signup and view all the answers

Explain the irony of a sumo wrestler being accused.

Sumo wrestling is a respected sport and belief system, making cheating a moral contradiction. Signup and view all the answers

What do the authors of Freakonomics conclude from the analysis of the Paul Feldman bagel sales data?

The honesty system worked, but people tend to act dishonestly due to easier rewards. Signup and view all the answers

What is the difference between correlation and causation?

Correlation relates to two actions while causation is the prerequisite of an event. Signup and view all the answers

Describe the incentives Ceauescu used to increase the birthrate in Romania and whether they were effective.

He used social and economic incentives to push for higher birth rates, which were effective. Signup and view all the answers

Summarize the argument by Donahue and Levitt regarding the relationship between the crime drop in the 1990s and the legalization of abortion.

Legalization allowed women to avoid unwanted pregnancies, which led to a decrease in future crime rates. Signup and view all the answers

What is the attachment theory?

If an unwanted baby is born, they may struggle with connections later in life. Signup and view all the answers

What is fear mongering?

Allowing people to impact irrational fears in you due to wanting what's best for your child. Signup and view all the answers

Why are parents more susceptible to fear mongering than others?

Because parents want what's best for their child. Signup and view all the answers

How does the contradictory and confusing information from parenting experts support the theme that incentives matter?

Experts often give advice based on social and economic incentives that conflict with parental moral perceptions. Signup and view all the answers

Describe the difference between normative and positive analysis.

Normative analysis is subjective while positive analysis is objective and factual. Signup and view all the answers

What is the ECLS, who conducted it, who was the target of the study, and what was its purpose?

The ECLS, organized by the US Department of Education, measures academic progress from kindergarten to grade 8. Signup and view all the answers

According to the data from the ECLS, what is more important for a child's success on standardized tests?

What a parent is is more important than what a parent does. Signup and view all the answers

What do the experiences of Winner Lane, Loser Lane, and Temptress tell us about the relationship between a child's name and their prospects for success in life?

A child's name is often indicative of their social background, not their success. Signup and view all the answers

What do the California names data tell us about the similarity between the names black parents and white parents gave their children until the early 1970s?

Before the 1970s, names were not assigned to race; after, names became racial indicators. Signup and view all the answers

According to the California names data, what are many parents trying to signal when choosing a name for their child?

Parents try to signal success by giving their child names associated with higher social status. Signup and view all the answers

What is consumer behavior?

The study of how people make decisions about what they buy, want, need, or act towards a product or service. Signup and view all the answers

What are government regulations?

Laws that control how businesses operate. Signup and view all the answers

What are unforeseen consequences?

Actions that have effects that are unanticipated or unintended. Signup and view all the answers

What is economic profit?

Total revenue minus expenditure equals total profit. Signup and view all the answers

What is the economic value of information?

How much a person is willing to pay for information. Signup and view all the answers

What is demand?

What customers want. Signup and view all the answers

What is supply?

Represents how much the market can offer. Signup and view all the answers

What is competition?

How many companies are competing for the same target market. Signup and view all the answers

What is scarcity?

How limited the resource is. Signup and view all the answers

What is nature?

Who you are as a result of genetics. Signup and view all the answers

What is nurture?

How your parents and society shape you. Signup and view all the answers

What affects a child's performance at school?

Income, education level of parents, and mother's age at birth of her first child. Signup and view all the answers

What are names an indication of?

Names indicate parental aspirations for a child's success. Signup and view all the answers

Why is the attachment theory not always true?

Due to genetics, not everyone is the same. Signup and view all the answers

If someone is born with the psycho gene but they aren't a psychopath, why is that?

Genes play a role but can be altered by upbringing. Signup and view all the answers

Study Notes

Incentives and Behavior

Moral incentive motivates individuals to behave correctly based on their ethics and beliefs about right and wrong.
Social incentive drives behavior through the desire for group acceptance and societal approval.
Economic incentive involves financial rewards or penalties influencing decisions and actions.
Conflicting incentive arises when two contradictory motivations lead to negative behavior, such as cheating.

Case Studies from Chapter One

Teachers in Chicago may cheat under economic pressure for job security or bonuses tied to student performance.
Sumo wrestlers exhibit moral, social, and economic incentives: helping peers is seen as right (moral), maintaining reputation (social), and financial gain from wins (economic).
The bagel sales study illustrates moral and economic incentives, showing how guilt and honesty influence payment behavior.

Cheating and Consequences

Cheating occurs as individuals seek to maximize return with minimal effort, often leading to moral conflicts.
Fines for tardiness in daycares replace moral guilt with economic implications, enabling parents to pay off their tardiness without feeling bad.

Unintended Effects of Policies

Standardized testing can lead to undesirable consequences where teachers prioritize their job security over students' education.
Sumo wrestling's cultural significance makes cheating particularly ironic, highlighting a contradiction between expected behavior and moral standards.

Insights on Human Behavior and Psychology

Paul Feldman's bagel data suggests that people are often dishonest when they perceive low risk of being caught, challenging the notion of inherent morality.
The attachment theory posits that unwanted children may struggle in relationships, impacting their social development and future interactions.

Parenting and Decision Making

Parents are more prone to fear-mongering due to their desire to protect their children, which can cloud rational decision-making.
Conflicting advice from parenting experts demonstrates a divide between moral motivations and scholarly recommendations based on economic incentives.

Analysis Types

Normative analysis focuses on subjective beliefs, whereas positive analysis relies on objective facts, critical for understanding parenting effectiveness.

Education Studies

The ECLS study explores the impact of socioeconomic status and parental involvement on children's academic performance, highlighting the significance of familial background over actions taken.
Children’s names can reflect their social backgrounds rather than predicting success, as evidenced by the experiences of 'Winner Lane', 'Loser Lane', and 'Temptress'.

Naming Trends and Expectations

The shift in naming conventions post-1970s indicates an association with racial identity and social movements.
Parents select names for their children with the hope of signaling success, often mirroring societal status and aspirations.

Economic Concepts

Understanding consumer behavior involves analyzing how decisions are made regarding purchases and services.
Government regulations impact business operations, illustrated by initiatives like a sugar tax.
Unforeseen consequences refer to the unexpected outcomes of individuals' or governments' actions, often diverging from initial intentions.

Economic Fundamentals

Economic profit is determined by total revenue minus total costs.
Demand reflects customers' needs and wants, while supply indicates the market's available offerings.
Competition drives the number of businesses seeking the same customer base.
Scarcity highlights resource limitations within the marketplace.

Nature vs. Nurture

Nature reflects genetic influences on behavior, while nurture encompasses the social and parental shaping of individuals.
Factors impacting children's academic performance include family income, parental education, and maternal age at the first birth.
Names chosen by parents often denote aspirations for success, rather than a guaranteed future outcome.

Behavioral Genetics

The attachment theory is not universally applicable due to genetic variance among individuals, showcasing the role of genetics alongside environmental influences.
Individuals with genetic predispositions may still diverge from expected behavioral outcomes due to nurturing factors.

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Description

Dive into the intriguing concepts of incentives with these flashcards based on 'Freakonomics'. Explore moral, social, and economic incentives to better understand human behavior and motivation in society. Perfect for anyone looking to enhance their knowledge in economics and behavioral science.