Discover Your Inner Economist: Use Incentives to Fall in Love,...

Features

• Cover Type: Paperback with 256 pages
• Published by: Plume; Reprint edition May 27, 2008
• Written in: English
• ISBN 10 Number: 0452289637
• ISBN 13 Number: 978-0452289635
• Book Dimensions: 7.8 x 5.3 x 0.6 inches
• Weighs: 7.2 ounces

From Publishers Weekly
Perhaps mindful that the procession of Freakonomics-inspired pop-economics books is becoming a blur, blogger Cowen aims to not hit the reader over the head with economic principles. Indeed, in his chatty disquisitions, economics often recedes into near invisibility. Few readers will hold it against this charming guide on how to get more of the good stuff in life. An engaging narrator, Cowen offers idiosyncratic strategies for appreciating museum art, for building family trust and cooperation, for writing a personal ad, for reading classic novels that seem boring on first inspection, for surviving torture, for properly practicing self-deception and for most effectively giving to beggars in Calcutta. In the book's most passionate and practical chapter, on food, Cowen explains how, with planning and tactics, we can eat much better meals at home and in restaurants, here and abroad. Throughout the book, the author's advice is less counterintuitive than simply surprising (he argues that the committed foodie should look to regions where some people are very rich and others are very poor). Even if you don't agree with all of Cowen's cheerfully offered opinions, it's a pleasure to accompany him through his various interests and obsessions. At the least, you'll pick up some useful tips for what to order at upscale restaurants. (Sept.)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved. --This text refers to the Hardcover edition.

From The Washington Post's Book World/washingtonpost.com
Reviewed by Carlos Lozada

"We are all Keynesians now," President Nixon is said to have declared in 1971.

His words affirmed the influence of John Maynard Keynes, the famed British economist who decades earlier had argued that smart governments could fine-tune a nation's economy and avert major slumps by manipulating taxes and spending.

These days, though, big-think economic theories feel a little passé. Why worry about inflation or unemployment or budget deficits when you can use economics to figure out why hotel mini-bars are so expensive? Or why people pay for gym memberships they rarely use? Or which first name will maximize your newborn's lifetime earnings?

We may have been Keynesians once, but times change. We are all Freakonomists now.

Steven D. Levitt and Stephen J. Dubner's 2005 bestseller, Freakonomics, captivated readers by using economics to demystify the little conundrums of daily life. I'd never wondered what schoolteachers and sumo wrestlers have in common, or why drug dealers live with their moms, but somehow Levitt and Dubner made me care.

It hardly took an economist -- freakish or otherwise -- to recognize a new market. A glut of similar books soon emerged, such as Tim Harford's The Undercover Economist, Robert H. Frank's The Economic Naturalist and, now, Tyler Cowen's Discover Your Inner Economist.

The books have much in common, including food imagery on their covers. Freakonomics shows an apple cut open to reveal an orange inside. (Message? Expect the unexpected!) Discover Your Inner Economist dangles a carrot. (Incentives are everything!) And The Economic Naturalist puts a pie chart next to an actual slice of pie. (Theory becomes practice!)

But open the covers, and the differences are notable. Inner Economist may not be the best organized or most gracefully written, but it could prove the most useful of the lot, especially if you share the author's interests. An economics professor at George Mason University, Cowen has written extensively on art and ethnic dining, and his chapters exploring those topics are particularly engaging.

The key to tapping your Inner Economist, Cowen explains, is the ability to identify people's true incentives, which are usually more than money. Suppose you want your daughter to help out around the house by washing dishes. Should you pay her?

Bad idea, Cowen warns. If you explain that washing dishes is her family responsibility, she may not always obey, but at least she'll feel some obligation. Bring payment into the picture, and her motivation changes. It becomes a market transaction, writes Cowen, and "the parent becomes a boss rather than an object of deserved loyalty." Your daughter will be less likely to reach for the Palmolive and more inclined to find part-time work that earns respect from her friends. "Expect dirtier dishes," Cowen concludes.

If you're visiting an art museum, your Inner Economist has tips to improve your experience. In each room, decide which painting you'd steal. "This forces us to keep thinking critically about the displays," Cowen writes. "If the alarm system was shut down and the guards went away, should I carry home the Cezanne, the Manet, or the Renoir?" If imaginary theft gives you qualms, pretend you're shopping. "We are probably better trained at shopping than looking at pictures," Cowen explains. How would you spend $500,000 at the Met? The smaller your imaginary budget, the better chance you'll avoid famous paintings and find interesting, lesser-known works.

Cowen also offers techniques for fine dining. At upscale restaurants, many people mistakenly order items they could easily cook at home. Instead, Cowen suggests, "order the item you are least likely to think you want." Chances are, you'll be happily surprised.

And if you're seeking great food overseas, Cowen offers ruthless economic logic: "It sounds heartless, but look for a big gap between the rich and the poor." Wealthy people are a strong market for tasty food, Cowen argues, and poor people will cook for low wages. "My meals in Mexico, India, and Brazil are typically delicious and cheap," he says.

Cowen encourages readers to disregard so-called sunk costs -- the money or time we've already spent on something -- and to make decisions based on future prospects. If a waiter doesn't know what entrée to recommend, walk out of the restaurant. If a movie is boring, leave halfway. If the book you're reading isn't "the best possible book I can be reading right now," find another.

That's all very well, I suppose. But what if finding parking near another restaurant could consume half your evening? What if you're at that movie with a date? And what if that book you're reading is, say, Discover Your Inner Economist?

Perhaps the ultimate affirmation of the Freakonomics phenomenon -- beyond the spate of copycat books -- is the backlash it has sparked. In April, the New Republic published an essay decrying the rise of "cute-o-nomics," lamenting that "clever" topics are crowding out important economic research.

If anything, I'd imagine Freakonomics helps the economics profession, attracting new students and making the dismal science a smidgen less dismal. When's the last time you saw someone thumbing through Keynes's General Theory at the beach?

Yet Keynes remains instructive here. Nixon's praise, ironically, came just as traditional Keynesianism began to fall from favor. High inflation and persistent unemployment during the 1970s undermined the notion that governments can ensure economic stability. Alternative economic theories soon prevailed, at least for a while.

Maybe the Freakonomics craze is peaking as well. Sure, it's fun to use economic principles to unravel everyday riddles. But cutting-edge researchers are going further, deploying the tools of psychology and neuroscience to probe economic behavior, using imaging technology to map our brains and understand how we invest, buy and save. Now that's freaky.

Copyright 2007, The Washington Post. All Rights Reserved. --This text refers to the Hardcover edition.

Reader Reviews
This review is from: Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist (Hardcover) Tyler Cowen is an economist, aptly self-described "curious intellectual nerd polymath," and a gifted blogger. His new book is the only one I've ever pre-purchased through Amazon. This in itself is a tribute to Cowen's capacity to mobilize appropriate incentives: He secreted a second blog, and advertised on Marginal Revolution that access was available only to those who wrote to say they'd pre-purchased a copy of DYIC. I spent this afternoon reading the book, and my overall impression is that "Sometimes, a bunch of appetizers does not make a meal." Because Cowen's brain brims with creative ways to approach life from an idiosyncratic angle, his blog has marvelous little jags, lists, apercus gleaned from his vast reading. This book is not quite a blook, but it would have greatly benefited from a co-author whose strength was more inclined to thoroughness. While he admits that his habit is to "stop writing just a bit before I have said everything I want to. I find it better to approach the next writing day 'hungry'..." (123), I was left hungry for more detail or resolution on almost every topic. As a troubling example, he introduces the concept of the "Me factor", and deploys it in several instances, but the only explanation provided was this very skimpy account, that focusing "our attention on ourselves ... is in fact our favorite topic. Me, me, me. ... [T]he 'Me factor', as I will call it." (52-3) There are tons of ideas broached here, and the chapters on Art and Food are particularly stimulating. The defense of self-deception felt self-indulgently sketchy, and the final account of how to deal with torture piffles into "Quite simply, it is hard to show other people, in a convincing manner, that we are telling the truth. In the meantime, file this problem under 'Difficult to Solve' and stay out of the wrong cities." (104). If truth in subtitles were enforced, it should be noted that Cowen offers very little to help survive your next meeting, nor do his thoughts on motivating your dentist inspire much confidence. Comment | | (Report this)