“Economics is not just about financial markets or industrial organization, but is also about understanding other people's behavior.” ~Steven E. Landsburg
Can You Outsmart an Economist? are designed to be fun as well as to train one’s brain in how to think the ways economists think, as well as to get one thinking about incentives and gain insights on how other people think to understand how they would behave the way they do. The puzzles include those that Steven had been thinking of for several years, some of which he taught in his class, as well as those he discovered recently.
Economics, according to Steven, is not just about financial markets or industrial organization but is also about understanding other people’s behavior by thinking about the incentives, information, opportunities and constraints they were facing when they participated in such behavior, which might initially seem strange to an outside observer. He includes puzzles which are tied to how parents define the size of their families as well as when to divorce and marry, as well as such things as the pricing of bread and how to best organize an economy - puzzles which are designed to make one think more deeply about what, on the surface, seems to be a simple concern with a simple outcome.
Some of the puzzles and situations that Steven commented on in the interview are:
- The correlation between physically beautiful teachers getting higher ratings than ordinary looking teachers;
- What happens when a strong and a weak pig are placed in a box with a lever at one end which can be pushed to deliver food at the other end of the box, which indicates that economic methodologies such as identification of incentives can likewise apply to the animal kingdom;
- Why coal miners and farmers get more attention from politicians than fast food cooks and motel owners;
- Why girls are preferred, when adopting, in nations where sons are preferred over daughters;
- Why Sony insists that all of its products are sold at the same price, regardless of source or merchant.
Steven remarks that the obvious, simple explanations for human behavior are often the wrong ones, and that the best way to uncover the root explanations for human behavior lie in thinking about the incentives and problems that people face. He also adds for people to keep an open mind and not just go for the first thing that occurs to them, critique one’s own answers by thinking about what might be missing in such answers.
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