Book Notes: Discover Your Inner Economist

Tyler Cowen’s new book Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist is a delightful read, chock-full of nuggets that can improve your life or at the least sharpen your understanding of why certain things are the way they are.

The title comes from Tyler’s insistence that economic thinking can be applied to various everyday situations. He’s proves this point by running the reader through a multitude of heavenly examples, touching on every category — high and low culture, medicine, food, business, torture, and so forth. As loyal readers of Marginal Revolution know, Tyler’s range is awe-inspiring. He has a certain gift for the “mind grenade”. This book is less polemic than a series of woven mind grenades.

Below are some of the nuggets from the book, as direct or paraphrased quotes. Enjoy the hacks, but to understand the context, do buy the book.

  • When asked what makes people tick, the responding participants cited “recognition and respect” as the number-one motivating factor in the workplace. “Achievement and accomplishment” came in second.
  • One study compared two methods for cleaning up a school. Authorities could a) lecture students that they should be neat and tidy, or b) compliment them for being neat and tidy. The lecturing had no effect, but the praise increased litter collection by a factor of three.
  • Rewards and penalites often fail when individauls feel a resulting loss of control. When we do apply incentives, we should frame them with respect and at least the appearance of consultation.
  • Behavior psychology suggests that the duration of a pain has little bearing on our memory of fhow bad that pain was. Instead, we tend to remember how bad the worst pain was, and we also remember how much pain we experienced at the beginning and at the end of the experience.
  • For the most part, getting a lot out of culture is an acquired skill, dependent on periodic immersion in a cultural environment, combined with a willingness to learn and adjust.
  • Admit that we don’t care as much about culture — at least any particular part of culture — as we like to think we do. If we force ourselves to “enjoy everything in the proper way” we often end up avoiding culture altogether.
  • When you go through each room in a museum, ask yourself which picture you would take home — if you could take home just one — and why. Force yourself to pay attention. This tactic appeals to the “Me Factor”. And when visiting a blockbuster exhibit, skip room #1 altogether because there is too much human traffic because people haven’t yet admitted to themselves that they don’t care about what’s on the wall.
  • When reading a complex novel, read some middle or end chapters first. They may pique your interest. Don’t obsess over sequence. When reading through the novel the first time, get interested in at least one character, even if the rest is a cipher. Then re-read the book as a whole in order.
  • Put down books when you become uninterested; walk out of movies mid-way through.
  • The best way to impress a woman is to do something that impresses other men.
  • The best gives are often those that we, as gift-givers, do not ourselves value very much. This is why women like when men give them flowers and diamonds.
  • Purchasing certain kinds of insurance is more about signaling commitment and loyalty than the actual insurance…product warranties are often not worth it.
  • Most stereotypes about liars aren’t true. If they have any detectable physical traits, they tend to move their arms, hands, and fingers less when they talk. They also blink less. When it comes to speech, liars make fewer stumbles or grammatical errors than do truth-tellers. They are less likely to backtrack and go back and fill in parts of the story “they forgot”. In sum, they try not to make mistakes for fear of looking like liars.
  • To get a person’s real opinion, ask what she thinks everyone else believes. This is the best way to get an honest opinion – “Bayesian truth serum”.
  • When to counter-signal: When we have good news, we should often withhold it, at least if we can afford to wait. Sooner or later the news will come out anyway. If need be, let a supposedly disinterested third party carry the report. Our audiences and friends will marvel, “What a modest type he is!”
  • Group brainstorming is not usually productive.
  • At fancy and expensive restaurants, order the item that sounds least appetizing and the dish you’re least likely to want to order. An item won’t be on the menu unless there is a good reason for its presence. If it sounds bad, it probably tastes especially good. Most popular-sounding items can be just slightly below the menu’s average quality. Beware roast chicken. Too many people like roast chicken, so it will be on the menu, but it doesn’t hit the highest peaks of taste. The flip side: when cooking at home, be wary of trying something new.
  • When at a restaurant, ask a waiter, “What is best?” Don’t ask, “What should I get?”
  • Tips for ethnic restaurants: appetizers are often better than main courses; avoid desserts at ethnic resaturants in America. Eat in countries with a lot of inequality — rich people who will want tasty food, and poor people who will cook for the rich people. The higher the level of wages at the bottom, the harder it is to employ labor to cook the food, prepare raw ingredients, etc. High wages are one reason why Western Europe is losing is role as culinary leader.
  • The people with the best cooking ideas are not always the people with the most money. Few immigrant families — who presumably cook the best, most authentic food of their type — live in high end neighborhoods.
  • Eat unhealthy food outside the home. Restaurants know how to make good unhealthy food. At home, eat healthy. And don’t take recipes too seriously.
  • In poor countries give money to those not asking for it. Don’t give to beggars.
  • Tipping is restaurants is not a great way to help the world. Most tipping occurs in relatively wealthy countries. The workers in restaurants have jobs. They are usually young and have high job prospects. And, if everyone started tipping 25 percent, employers would just pay less. So tip 15 percent, even if the waitress is cute, and send the rest abroad.

3 Responses to Book Notes: Discover Your Inner Economist

  1. andy says:

    I enjoyed many of these ideas, but why not just tip 20%? It’s such a happy medium! But Cowen obviously has a lot of interesting ideas, I will check this book out.

  2. Tyler Cowen says:

    Thanks for the post…!

  3. johan says:

    hey Ben
    thanks for the post :)
    you made me curious.. how do you read a book? you make notes, mark stuff? got any special technique?
    Johan

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