The first chapter of Freakonomics opens with an experiment that consisted of fining parents who picked up their children late from a day-care center. After the three dollar fine was put into place, the average of late pickups actually doubled (Levitt & Dubner, 2009). The small fine acted as an incentive for parents to start picking their kids up on time, but all it did was send a signal that late pickups were only a three dollar hassle to the day-care center. The incentive ultimately eliminated any of the guilt the parents once had for picking their children up late. This is just one of the ways the authors described the power of incentives and the drastic results they can produce.
The authors then introduce the topic of high-stakes testing, which increases a teacher’s incentive for cheating. If a teacher has students that receive poor test scores, the teacher can be passed over for a raise. In extension, if the whole school does not do well then federal funding can be withheld and the teacher could be fired. Teachers can also receive positive incentives for their students to perform better on the high-stakes testing, which include promises of promotions and bonuses (Levitt & Dubner, 2009). The positive and negative incentives for
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One thing I found very interesting in the section about sumo wrestling was the way the ranking system works. The difference between the most elite and the low ranking wrestlers is shocking. There is a staggering difference between the paychecks, but what shocked me most was that the low ranking sumos are basically slaves to the elite sumos (Levitt & Dubner, 2009). Even though I am not familiar with sumo wrestling, with the help of the statistics provided in the reading and an application of common sense, it is easy to assume that there is some kind of rigging in the