From Eric Kirkland, a photo of an ice-cream shop in Colorado Springs with a weather-sensitive customer-loyalty plan: Read More »
John List and Uri Gneezy have appeared on our blog many times. This guest post is part a series adapted from their new book The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life. List appeared in our recent podcast “How to Raise Money Without Killing a Kitten.”
Money is important. For a long time, economists thought that it was the only thing that mattered. And, in fact, if you want people to do what you want, money can be incredibly useful. Out to entice the best workers? Pay more. Want to sell a product? Discount it, a lot. Want to discourage a bad behavior? Impose a monetary fine.
It seemed a little silly to us though (as well as to other behavioral economists doing work back in the 1990s) to think that money was the only thing that mattered. So we set out to learn exactly when and how monetary incentives work. Along the way, we discovered some environments where incentives don’t work at all. Read More »
John List and Uri Gneezy have appeared on our blog many times. This guest post is part of a series adapted from their book The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life. List also appeared in our recent podcast “How to Raise Money Without Killing a Kitten.”
If you look at two pictures of two athletes: One is beaming, the other doesn’t seem too sure what she’s feeling. Which do you think won the silver? Which the bronze? Easy, right? Silver is better than bronze, so the smiling girl on the right must have won the silver. Which do you think won the silver? Which the bronze? Easy, right? Silver is better than bronze, so the smiling girl on the right must have won the silver. Read More »
Last spring, I blogged about the $5/day for in-house food purchases that many Sheraton hotels give guests who waive house-cleaning. In some hotels, they offer a choice between the $5 and 500 frequent-guest points. Which is better? For infrequent guests like me, the $5 is better. But in some of the best Sheraton hotels, it only takes 10,000 points to obtain a free night—i.e., 20 days of no house-cleaning. If you are a frequent guest, that seems like a much better deal—the opportunity cost of one free night is $100, typically far below the price of a night. The Sheraton’s offer creates a separation between infrequent and frequent guests, benefiting the latter (and giving people an incentive to become frequent guests). (HT: DJH)
If you have a tough decision to make, wander on over to FreakonomicsExperiments.com. So far we’ve helped more than 20,000 people make decisions, and the preliminary results look great.
As an incentive to get people who tossed coins at FreakonomicsExperiments to complete follow-up surveys, we promised to give away prizes via lottery. As evidence we kept our word, the complete list of winners is here. Read More »
The Laffer Curve is a unicorn-y concept that seeks to explain the rate of taxation at which revenues will fall because earners either move away or decide to earn less (or cheat more, I guess).
If I were a tax scholar interested in this concept, I would be taking a good, hard look at the current behavior of top-tier professional athletes. Boxing is particularly interesting because it allows a participant to choose where he performs. If you are a pro golfer or tennis player, you might be inclined to skip a particular event because of a tax situation, but you generally need to play where the event is happening. A top-ranked boxer, meanwhile, can fight where he gets the best deal.
Which is why it’s interesting to read that Manny Pacquiao will probably never fight in New York — primarily, says promoter Bob Arum, because of the taxes he’d have to pay. Read More »
A reader from Wadsworth, Ohio, named Tom Morris writes with an idea. He is a lawyer and, he says, and an “occasional acting judge in a small town”:
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In my capacity as acting judge, I find myself repeatedly dealing with the same issues. Young adults irresponsibly having kids without any ability, either monetarily or emotionally, to raise them. These unwanted kids are left unsupervised, and are more likely to commit crimes and have more unwanted kids, which continues this cycle.
While I have not crunched the numbers to support this hypothesis, it is consistent with Dr. Levitt’s study made famous from your first book. Unwanted children are a bad thing. Preventing this “bad thing” would lead to a reduction in crime, reduction in poverty, and a reduction of just about every other social ill I can think of.