The Economics of Everything (Kind Of)

Tyler Cowen’s book Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist didn’t teach me anything new about love, meetings, or manipulating my dentist, but it was an interesting manifesto of sorts.  Since the book was written by an economist, his musings on various facets of life have a sort of econ feel, even if I didn’t really find it to be all that life-changing.

Cowen is interested in the various sorts of incentives we use and are motivated by, and the book is his attempt to link lots of bits of life to incentives (monetary and otherwise).  While Cowen’s thoughts on how to pick an ethnic restaurant or how to best devote our charitable giving were interesting, I can’t say that I finished the book feeling like I knew much more econ than I did previously.

That said, I did learn some things, and found some helpful observations.  Here are a few things that jumped out at me:

  • People who are really stressed out are more prone to groupthink.  This could explain why I keep crowd-sourcing decisions on Facebook lately…
  • In the middle class Western world, people more often have a deficit of time and attention than a deficit of small sums of cash.  So if you’re trying to incentivize someone, and you don’t have a ton of money to offer, look into ways to make time an incentive.
  • Brainstorming in a group, and in fact almost all group work, is less productive or even counter-productive in most cases.  So unless you’re trying to build camaraderie amongst your team, consider canceling at least some of the meetings you hold.
  • Most people value gifts they receive at about 40% of what the giver actually spent.  So look for serious sales when you’re buying a gift!

If you like to read people’s manifestos on life, and if you think you might enjoy one with an economics focus, you might like Discover Your Inner Economist.  I do think the economist angle was a tad oversold, but if you go into it not expecting that, I think you’d enjoy it.

 

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