Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist

We may have been Keynesians once, but times change. We are allFreakonomists now.Steven D. Levitt and Stephen J. Dubner's 2005 bestseller, Freakonomics,captivated readers by using economics to demystify the littleconundrums of daily life. I'd never wondered what schoolteachersand sumo wrestlers have in common, or why drug dealers live withtheir moms, but somehow Levitt and Dubner made me care.It hardly took an economist -- freakish or otherwise -- to recognizea new market. A glut of similar books soon emerged, such as TimHarford's The Undercover Economist, Robert H. Frank's The EconomicNaturalist and, now, Tyler Cowen's Discover Your Inner Economist.The books have much in common, including food imagery on theircovers. Freakonomics shows an apple cut open to reveal an orangeinside. (Message? Expect the unexpected!) Discover Your InnerEconomist dangles a carrot. (Incentives are everything!) And TheEconomic Naturalist puts a pie chart next to an actual slice ofpie. (Theory becomes practice!)But open the covers, and the differences are notable. Inner Economistmay not be the best organized or most gracefully written, butit could prove the most useful of the lot, especially if you sharethe author's interests. An economics professor at George MasonUniversity, Cowen has written extensively on art and ethnic dining,and his chapters exploring those topics are particularly engaging.The key to tapping your Inner Economist, Cowen explains, is theability to identify people's true incentives, which are usuallymore than money. Suppose you want your daughter to help out aroundthe house by washing dishes. Should you pay her?Bad idea, Cowen warns. If you explain that washing dishes is herfamily responsibility, she may not always obey, but at least she'llfeel some obligation. Bring payment into the picture, and hermotivation changes. It becomes a market transaction, writes Cowen,and "the parent becomes a boss rather than an object of deservedloyalty." Your daughter will be less likely to reach for the Palmoliveand more inclined to find part-time work that earns respect fromher friends. "Expect dirtier dishes," Cowen concludes.If you're visiting an art museum, your Inner Economist has tipsto improve your experience. In each room, decide which paintingyou'd steal. "This forces us to keep thinking critically aboutthe displays," Cowen writes. "If the alarm system was shut downand the guards went away, should I carry home the Cezanne, theManet, or the Renoir?" If imaginary theft gives you qualms, pretendyou're shopping. "We are probably better trained at shopping thanlooking at pictures," Cowen explains. How would you spend $500,000at the Met? The smaller your imaginary budget, the better chanceyou'll avoid famous paintings and find interesting, lesser-knownworks.Cowen also offers techniques for fine dining. At upscale restaurants,many people mistakenly order items they could easily cook at home.Instead, Cowen suggests, "order the item you are least likelyto think you want." Chances are, you'll be happily surprised.And if you're seeking great food overseas, Cowen offers ruthlesseconomic logic: "It sounds heartless, but look for a big gap betweenthe rich and the poor." Wealthy people are a strong market fortasty food, Cowen argues, and poor people will cook for low wages."My meals in Mexico, India, and Brazil are typically deliciousand cheap," he says.Cowen encourages readers to disregard so-called sunk costs --the money or time we've already spent on something -- and to makedecisions based on future prospects. If a waiter doesn't knowwhat entrée to recommend, walk out of the restaurant. If a movieis boring, leave halfway. If the book you're reading isn't "thebest possible book I can be reading right now," find another.That's all very well, I suppose. But what if finding parking nearanother restaurant could consume half your evening? What if you'reat that movie with a date? And what if that book you're readingis, say, Discover Your Inner Economist?Perhaps the ultimate affirmation of the Freakonomics phenomenon-- beyond the spate of copycat books -- is the backlash it hassparked. In April, the New Republic published an essay decryingthe rise of "cute-o-nomics," lamenting that "clever" topics arecrowding out important economic research.If anything, I'd imagine Freakonomics helps the economics profession,attracting new students and making the dismal science a smidgenless dismal. When's the last time you saw someone thumbing throughKeynes's General Theory at the beach?Yet Keynes remains instructive here. Nixon's praise, ironically,came just as traditional Keynesianism began to fall from favor.High inflation and persistent unemployment during the 1970s underminedthe notion that governments can ensure economic stability. Alternativeeconomic theories soon prevailed, at least for a while.Maybe the Freakonomics craze is peaking as well. Sure, it's funto use economic principles to unravel everyday riddles. But cutting-edgeresearchers are going further, deploying the tools of psychologyand neuroscience to probe economic behavior, using imaging technologyto map our brains and understand how we invest, buy and save.Now that's freaky.