Freakonomics - download pdf or read online

By Levitt S.D., Dubner S.J.

ISBN-10: 0060731338

ISBN-13: 9780060731335

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Additional resources for Freakonomics

Example text

A street crime has a victim, who typically reports the crime to the police, who generate data, which in turn generate thousands of academic papers by criminologists, sociologists, and economists. But white-collar crime presents no obvious victim. From whom, exactly, did the masters of Enron steal? And how can you measure something if you don’t know to whom it happened, or with what frequency, or in what magnitude? Paul Feldman’s bagel business was different. It did present a victim. The victim was Paul Feldman.

In 1984, when his research institute fell under new management, Feldman took a look at his future and grimaced. He decided to quit his job and sell bagels. His economist friends thought he had lost his 41 F R E A KO N O M I CS mind, but his wife supported him. The last of their three children was finishing college, and they had retired their mortgage. Driving around the office parks that encircle Washington, he solicited customers with a simple pitch: early in the morning, he would deliver some bagels and a cash basket to a company’s snack room; he would return before lunch to pick up the money and the leftovers.

The typical economist believes the world has not yet invented a problem that he cannot fix if given a free hand to design the proper incentive scheme. His solution may not always be pretty—it may involve coercion or exorbitant penalties or the violation of civil liberties—but the original problem, rest assured, will be fixed. An incentive is a bullet, a lever, a key: an often tiny object with astonishing power to change a situation. We all learn to respond to incentives, negative and positive, from the outset of life.

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Freakonomics by Levitt S.D., Dubner S.J.

by James

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