Everything Is Obvious_ _Once You Know the Answer - Duncan J. Watts [18]
In Freakonomics, Steven Levitt and Stephen Dubner illustrate the explanatory power of rational choice theory in a series of stories about initially puzzling behavior that, upon closer examination, turns out to be perfectly rational. You might think, for example, that because your real estate agent works on commission, she will try to get you the highest price possible for your house. But as it turns out, real estate agents keep their own houses on the market longer, and sell them for higher prices, than the houses of their clients. Why? Because when it’s your house they’re selling, they make only a small percentage of the difference of the higher price, whereas when it’s their house, they get the whole difference. The latter is enough money to hold out for, but the former isn’t. Once you understand the incentives that real estate agents face, in other words, their true preferences, and hence their actions, become instantly clear.
Likewise, it might at first surprise you to learn that parents at an Israeli day school, when fined for picking up their children late, actually arrived late more often than they did before any fine was imposed. But once you understand that the fine assuaged the pangs of guilt they were feeling at inconveniencing the school staff—essentially, they felt they were paying for the right to be late—it makes perfect sense. So does the initially surprising observation that most gang members live with their mothers. Once you do the math, it turns out that gang members don’t make nearly as much money as you would think; thus it makes perfect economic sense for them to live at home. Similarly, one can explain the troubling behavior of a number of high-school teachers who, in response to the new accountability standards introduced by the Bush Administration’s 2002 No Child Left Behind legislation, actually altered the test responses of their students. Even though cheating could cost them their jobs, the risk of getting caught seemed small enough that the cost of being stuck with a low-performing class outweighed the potential for being punished for cheating.6
Regardless of the person and the context, in other words—sex, politics, religion, families, crime, cheating, trading, and even editing Wikipedia entries—the point that Levitt and Dubner keep returning to is that if we want to understand why people do what they do, we must understand the incentives that they face, and hence their preference for one outcome versus another. When someone does something that seems strange or puzzling to us, rather than writing them off as crazy or irrational, we should instead seek to analyze their situation in hopes of finding a rational incentive. It is precisely this sort of exercise, in fact, that we went through in the last chapter with the ultimatum game experiments. Once we discover that the Au and Gnau tradition of gift exchange effectively transforms what to us looks like free money into something that to them resembles an unwelcome future obligation, what was previously puzzling behavior suddenly seems as rational as our own. It is just rational according to a different