TB: SuperFreakonomics (Levitt & Dubner)
Core Thesis
Seemingly intractable problems — horse manure crises, global warming, infectious disease — are often solved by unexpected technological innovations or by examining incentive structures that everyone else overlooked.
Key Takeaways
On incentives
- People who buy annuities live longer than people who don't — the steady payout gives an extra incentive to keep going. A stunning example of incentives shaping biology.
- Ambulances used to be run by local mortuaries — hard to think of a better example of misaligned incentives.
- Any incentive is inherently a trade-off. The trick is to balance the extremes.
On problem solving
- In 1818 the world seemed unable to survive without the horse or with it — then the problem vanished, solved by technological innovation. Lesson for climate change?
- Global warming geoengineering: injecting sulfur into the stratosphere has volcano proof-of-principle; may be simpler and cheaper than emissions reduction alone.
- If you believe in scary warming scenarios, relying only on carbon emission reduction is logically insufficient — geoengineering must be on the table.
On expertise and data
- "Experts" use their informational advantage to serve their own agenda — but can be beaten at their own game.
- Knowing what to measure and how to measure it makes a complicated world much less so.
- Conventional wisdom is often shoddily formed and devilishly difficult to see through.
Mental Models
- Incentives Matter — the book's organizing principle; annuities example is striking
- Inversion — solve the constraint (horse manure) by looking at what you want to avoid
- Second-Order Thinking — incentive-shaped biology is a second-order consequence