Understanding Freakonomics Better: Random Decisions are Not Random

Freakonomics by Steven Levitt takes a look at interaction between different people and the way they take their decisions

. He believes people never take random decisions, they follow certain rules (which may be self imposed, not necessarily external) and most of the time they try to get something or people related to them or for themselves. The rules by which the humans take their decisions may include moral, social or economic incentives or benefits.

Striking a Balance

There are three possible outcomes for any (dis)incentive schemes if these are very weak or strong, the desired result will not occur. Even if they occur, they may come with some extra baggage of ill will among the subjects. The decisions will be happily adopted by the people if we can strike a balance between a strong incentive and a weak incentive.

Everyone Gets the Difficult Answer Right

Another interesting aspect of the incentives is cheating which is defined as getting more benefit for less (than justified) effort invested in the work. Let's talk about the schools where the teachers are punished or rewarded according to the performance of their students. Teachers cheat through many means available to them to ensure they get the incentives. They correct the toughest answer for all the students which they are likely to have gotten wrong. The result is - a disproportionately high number of students get the toughest answer right and other easier answers wrong (mostly). They may also correct the answers written by the dumbest students, who are likely to be wrong most of the time in the teacher's perception.

We Need To Think Like Cheaters

Steven Levitt says if we have to catch the cheaters, we need to think the way they do. We need to find out what kind of cheating would bring most benefit for them, though they do tend to use easier techniques also even if they bring lesser returns. The high stakes testing was introduced in 1996, and the authorities detected suspicious changes in the marks obtained by some students over a year.

Was The Student Cheating?

So the question is, can we be sure the teachers were cheating by helping their students or not? It can be safely said the teachers only help their students if the results affect their own financial status, otherwise they don't. Steven Levitt says if the performance of the student falls after one year, they were probably cheating. Another possibility may be that the moment the student left his comfort zone, his performance slipped.

Understanding Freakonomics Better: Random Decisions are Not Random

By: Prasoon Kumar

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