Steven D. Levitt's Freakonomics
ECON 260
Freakonomics
Freakonomics, by Steven D. Levitt and Stephen J. Dubner, is book that not your typical economist would write it was co-authored in 2005 and if morality represents how we would like the world to work, then economics represent how it actually does work in this award-winning book. Steven D. Levitt is a not your typical economist. He is a much-heralded scholar who studies the riddles of everyday life- from cheating and crime to sports and child rearing and whose conclusions turn the conventional wisdom on its head (freakonomics.com). Stephen J. Dubner is an award-winning author and journalist (freakonomics.com). These two authors team up to create a very insightful groundbreaking collaboration. They set out to to explore …show more content…
Levitt and Dubner use dealing crack cocaine as an example of an incentive to better yourself and make money through harsh working environments, but it is also an example of a basic economic principle called “tournament type markets”. They strategically use the example of dealing crack cocaine as a “tournament” type market by convincing the reader this is a “winner take all” field of work. Street-level drug salesman usually are motivated by the idea of getting promoted in the drug business, so they ultimately try to maximize the gang’s profits. Higher ranker officials however are more interested in making money since they are already in a position of high status. Overall in this market there are many players, but one by one they are eliminated. At the end, a victor emerges and takes home the “prize” or money. As stated in the book, the top 120 “managers” in the Black disciples gang represented just 2.2 percent of the full-fledged gang membership, but took home well more than half the money. This is a “tournament” style market because these “managers” emerged from all the other competitors and are now high ranking, they won the “tournament” in
Freakonomics
Freakonomics, by Steven D. Levitt and Stephen J. Dubner, is book that not your typical economist would write it was co-authored in 2005 and if morality represents how we would like the world to work, then economics represent how it actually does work in this award-winning book. Steven D. Levitt is a not your typical economist. He is a much-heralded scholar who studies the riddles of everyday life- from cheating and crime to sports and child rearing and whose conclusions turn the conventional wisdom on its head (freakonomics.com). Stephen J. Dubner is an award-winning author and journalist (freakonomics.com). These two authors team up to create a very insightful groundbreaking collaboration. They set out to to explore …show more content…
Levitt and Dubner use dealing crack cocaine as an example of an incentive to better yourself and make money through harsh working environments, but it is also an example of a basic economic principle called “tournament type markets”. They strategically use the example of dealing crack cocaine as a “tournament” type market by convincing the reader this is a “winner take all” field of work. Street-level drug salesman usually are motivated by the idea of getting promoted in the drug business, so they ultimately try to maximize the gang’s profits. Higher ranker officials however are more interested in making money since they are already in a position of high status. Overall in this market there are many players, but one by one they are eliminated. At the end, a victor emerges and takes home the “prize” or money. As stated in the book, the top 120 “managers” in the Black disciples gang represented just 2.2 percent of the full-fledged gang membership, but took home well more than half the money. This is a “tournament” style market because these “managers” emerged from all the other competitors and are now high ranking, they won the “tournament” in