In “Freakonomics: The Movie” Steven Levitt and Stephen Dubnor explain why incentives matter because if you can figure out what people’s incentives are you can guess with reasonable accuracy how they will behave. Economics is just boring graphs and statistics – wrong. Freakononics challenges conventional wisdom by analysing how people behave in interesting situations, stripping away the maths and complexity which makes Economics hard to understand.
“All of economics is meant to be about people’s behavior. So, what is behavioral economics, and how does it differ from the rest of economics? Economics traditionally conceptualizes a world populated by calculating, unemotional maximizers that have been dubbed Homo economicus.”
In reality human behaviour and decision making is far from logical and often bad for their own interests in the medium to long term.
Economics is the study of scarcity, the trade offs made when there are things people want but not enough of the things to go around. Examples like “does your real estate agent have your best interests in mind?” are used to illustrate how incentives effect people’s bahaviour in a disjointed set of mini documentaries connected by banter between Dubner & Levitt.
The Extras 36 minute mini-documentary explains what Freakonomics a lot more cohesively then the movie does. I suggest watching it before watching the movie so you understand the context and ideas behind the story.
The Truth About Real Estate Agents
The Incentives Of Daycare
“Freakonomics: The Movie” can be purchased in DVD format from Madman Entertainment (Australia’s leading distributor of special interest TV/movie genres). A review DVD copy was sent to me by Madman because they knew I am interested in behavioural economics.