ThinkLikeAFreak
Think Like a Freak (Steven Levitt and Stephen Dubner)
- Short and Sweet
- Incentives are the cornerstone of modern life and deciphering them is the key to understanding a problem and how it might be solved.
- Romania: Lawmakers decided that witches should be regulated, taxed and made to pay fines if the fortunes told are not accurate.
What it comes to solving problems, start by putting away your moral compass when consumed with the rightness or wrongness of issues can cloud thinking.
- If you ask the wrong questions your are almost guaranteed to get the wrong answer.
Cooling off period: Ideas always seem brilliant when hatched.
- Better to ask small question than big ones:
- Virgin territory for true learning
- Potential for more progress
- Chances for change higher
- Declared vs revealed preferences: Watch what people DO, not what they say.
- Your opponents opinion likely based less on fact than on ideology and heard thinking.
- Resources are finite: you cant solve tomorrows problems if you aren't willing to abandon today's dud.
You would think that informed educated people would become moderates, turns out that really smart people turn out to be smart enough to have a very strong view and make it stronger by seeking evidence that confirms their bias. Its a hard problem.
- Only thing you can actually see in the data is correlation. Causality comes from something deeper. Absent a randomized experiment, you have to intuit or trick the data into revealing. All we really care about is causality. That the fundamental challenge of social science in a world where you see correlations.
People should pay for their health care. If you want to get really expensive treatments, you should have to pay a big chunk of that. We should treat health care and life and death more like a regular good. We spend nearly 20% of GDP on health care. We shy away from life and death decisions and we pretend that life has infinite value and we cant make hard decisions. But either people or governments will. A simple p,an is to give people catastrophic insurance but make them pay for what they use. The hospitals will stop over charging and the world would be a better place.