In chapter one of 'Freakonomics', the authors explore the incentives behind cheatings in honour sports such as Sumo Wrestling, the national sport of Japan. It derives the conclusion that if the income distribution within specific industries varies greatly between the top and bottom, individual players have great incentive to cheat or cause the system to work in its favour. This is especially true if the industry regulators also have vested interest in tolerating unbecoming behaviours. (for more coverage of the Sumo scandal beyond the book, listen to an audio report by The Economist.)
The chapter provides statistical evidence and present the case convincingly. To solidify their proposition, the authors present in the same chapter some empirical evidence that, under the above mentioned condition, even school teachers cheat in exams- no, not exams they sat as students, but on behalf of students they teach in exams that they invigilate.
If there is a common theme between cheating teachers and sumo wrestlers- indeed if there is a common theme for the book, it is "Incentive".
And that, in my opinion, is the single most important reason behind the financial crisis that we are witnessing. The tsunami begin to gather force many years before and show of all its latent power in the past year. Over the next few postings, I will attempt to document events that I think contributed to the crescendo of financial destruction. I will begin recounting from 1998 (though it might have begun earlier)...
The chapter provides statistical evidence and present the case convincingly. To solidify their proposition, the authors present in the same chapter some empirical evidence that, under the above mentioned condition, even school teachers cheat in exams- no, not exams they sat as students, but on behalf of students they teach in exams that they invigilate.
If there is a common theme between cheating teachers and sumo wrestlers- indeed if there is a common theme for the book, it is "Incentive".
And that, in my opinion, is the single most important reason behind the financial crisis that we are witnessing. The tsunami begin to gather force many years before and show of all its latent power in the past year. Over the next few postings, I will attempt to document events that I think contributed to the crescendo of financial destruction. I will begin recounting from 1998 (though it might have begun earlier)...
No comments:
Post a Comment