Freakonomics: Looking At Incentives Merritt Essay

701 words - 3 pages

Pescador !1
Christian Pescador
September 26, 2017
In everyday society people have, to make choices that directly affect their overall quality of
life. The question is what variables and factors lead into making these decisions? The answer can
be found in the book “Freakonomics A Rogue Economist Explores the Hidden Side of Everything”
by Steven D. Levitt and Stephen J. Dubnerbrings. Freakonomics brings together many
combinations of thoughts that one wouldn’t find relevant in companionship. The book is about the
study of economics based on the principle of incentives. The book differentiates incentives into
three categories, economic, social and moral. By understanding incentives, one can understand why
humans make the decisions that they do. This paper will illustrate all three incentives at once when
looking deep into the example of sumo wrestlers and their incentives to cheat or not to cheat.
In this paragraph we will discuss the economic incentive sumo wrestler’s have to cheat.
Sumo wrestling is a sport of national pride, but when it comes to bouts that count, the bouts are
rigged mainly for the economic incentive. Levitt explains, “The incentive scheme that rules sumo
is intricate and extraordinarily powerful. Each wrestler maintains a ranking that affects every slice
of his life: how much money he makes, how large an entourage he carries…” There is a lot of
motivation to maintain your ranking if you're an elite or to move up the rankings. The incentive to
reach or maintain a wrestler’s ranking causes wrestlers to take bribes so wrestlers can move up in
the rankings. Since a wrestler’s ranking directly affects their money there is incentive for them to
cheat so they can reap the benefits. Additionally, this economic incentive intertwines with the social
Pescador !2
In this paragraph we will look into the social incentive wrestlers face when they rig bouts.
Data in this chapter suggest that a wrestler might throw a match to help his opponent maintain his
current ranking, when throwing the match does not hurt or help his current ranking. Levitt...

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