Freakonomics Chapter 1 Summary

Extra Credit Assignment: Freakonomics

“So if sumo wrestlers, schoolteachers, and day-care parents all cheat, are we to assume that mankind is innately and universally corrupt? And if so, how corrupt?” (Levitt and Dubner 43). In my opinion this rhetorical question summarizes Chapter 1’s findings and poses two different sides of an argument. The author finds that cheating is more common when an individual is placed into a win or lose situation. The incentive to cheat is the concept that an individual is getting more for less. So, similarly to how teachers may change their students’ test scores to get a higher pay or praise, sumo-wrestlers might rig matches to obtain a higher ranking. To analyze how incentives cause teachers and sumo wrestlers

to take these shortcuts, I will use a quote by B. F. Skinner: “The consequences of an act affect the probability of its occurring again.”
The way incentives drive behavior is similar to the process of operant conditioning, which was studied for many years by B.F.

Skinner. This process of operant conditioning encompasses the idea that behaviors are fulfilled to either gain reinforcement or evade punishment. This correlates to how incentives suggest that an individuals’ actions are directed towards achieving an award (Cherry). Chapter 1 of Freakonomics relates to managerial accounting by addressing incentives and how they influence behavior. Internal controls typically protect an organization from fraud or abuse. They govern a company’s financial system and monitor procedures. Therefore, with both situations (teachers and sumo wrestlers) described in Chapter 1, internal controls are necessary to monitor cheating and try to stop

it.
One mechanism or internal control I would implement in order to prevent cheating by school teachers is a punishment. Once again referencing operant conditioning, an association is always made between a behavior and a corresponding consequence. Therefore, the first step would be to have accurate procedures to monitor cheating. Second would be to make it apparent that if a teacher is caught cheating, they will be fired without question. Teachers are much less likely to cheat for their students if their job is on the line. We could also revoke the positive reinforcement of promotions and rewards for high test scores. Teachers should be promoted based on their teaching strategies in the classroom rather than test scores, because often times students’ standardized testing scores do not accurately exhibit what they have learned. By using positive reinforcements like promotions and raises, there is a direct correlation to cheating because it puts teachers in a win/lose situation that persuades them to do things they usually wouldn’t. Simply put, to stop teachers from cheating, there must be a severe consequence associated with this behavior.
To prevent sumo wrestlers from cheating, I would use the same technique of operating conditioning.

I would propose that the more wins a sumo wrestler obtains, the more money he wins and the higher he is ranked. This way, the more matches sumo wrestlers win, the more they are rewarded. Providing this positive incentive of being rewarded more money and a higher ranking for making every match count; no sumo wrestlers will want to simply hand away matches to their competition because it now has a negative outcome on them. Levitt uses crime as another example in Chapter 4 to examine incentive schemes and why more people don’t commit crimes. This is because of the risks or economic, social, and moral punishments associated with the act of committing a crime. So, by implementing rewards and making the punishments more severe for suspicions of cheating, sumo wrestlers will be less likely to cheat. It should be known that if a competitor is discovered to be cheating, their reputation as a wrestler will be ruined, they will no longer be able to compete, and they will be charged a large fine. By employing all parts of the spectrum, economic, social, and moral punishments, sumo wrestlers will find it much more difficult to defy the

rules.
As stated in the epilogue, Freakonomics certainly does not have one overbearing theme; however, it’s main purpose is “to think sensibly about how people behave in the real world” (Levitt and Dubner 209). The key to impeding cheaters, whether it be teachers or sumo-wrestlers, is to give them an incentive not to. Whether it be economic, social, or moral, a positive or negative incentive will persuade individuals to act a certain way. We live in an individualistic society where often times people have the most concern for their own well-being. Forming high stake punishments or incentives against cheating will encourage individuals not to cheat, purely because they do not want to jeopardize their own security.

Works Cited
Cherry, Kendra. “Incentives and Motivation: How Do Rewards Drive Actions?” Verywell Mind, 4 Nov. 2017, www.verywellmind.com/the-incentive-theory-of-motivation-2795382.