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

by Tyler Cowen

One of America's most respected economists presents a quirky, incisive romp through everyday life that reveals how you can turn economic reasoning to your advantage--often when you least expect it to be relevant.Like no other economist, Tyler Cowen shows how economic notions--such as incentives, signals, and markets--apply far more widely than merely to the decisions of social planners, governments, and big business. What does economic theory say about ordering from a menu? Or attracting the right mate? Or controlling people who talk too much in meetings? Or dealing with your dentist? With a wryly amusing voice, in chapters such as "How to Control the World, The Basics" and "How to Control the World, Knowing When to Stop" Cowen reveals the hidden economic patterns behind everyday situations so you can get more of what you really want.

Readers will also gain less selfish insights into how to be a good partner, neighbor and even citizen of the world. For instance, what is the best way to give to charity? The chapter title "How to Save the World--More Christmas Presents Won't Help" makes a point that is every bit as personal as it is global.

Incentives are at the core of an economic approach to the world, but they don't just come in cash. In fact, money can be a disincentive. Cowen shows why, for example, it doesn't work to pay your kids to do the dishes. Other kinds of incentives--like making sure family members know they will be admired if they respect you--can work. Another non-monetary incentive? Try having everyone stand up in your next meeting if you don't want anyone to drone on. Deeply felt incentives like pride in one's work or a passing smile from a loved one, can be the most powerful of all, even while they operate alongside more mundane rewards such as money and free food.

Discover Your Inner Economist is an introduction to the science of economics that shows it to be built on notions that are already within all of us. While the implications of those ideas lead to Cowen's often counterintuitive advice, their wisdom is presented in ordinary examples taken from home life, work life, and even vacation life... How do you get a good guide in a Moroccan bazaar?

Genres: Economics, Nonfiction, Psychology, Business, Self Help, Personal Development, Social Science

245 pages, Paperback

First published January 1, 2007

About the author

Tyler Cowen (born January 21, 1962) occupies the Holbert C. Harris Chair of economics as a professor at George Mason University and is co-author, with Alex Tabarrok, of the popular economics blog Marginal Revolution. He currently writes the "Economic Scene" column for the New York Times and writes for such magazines as The New Republic and The Wilson Quarterly.

Cowen's primary research interest is the economics of culture. He has written books on fame (What Price Fame?), art (In Praise of Commercial Culture), and cultural trade (Creative Destruction: How Globalization is Changing the World's Cultures). In Markets and Cultural Voices, he relays how globalization is changing the world of three Mexican amate painters. Cowen argues that free markets change culture for the better, allowing them to evolve into something more people want. Other books include Public Goods and Market Failures, The Theory of Market Failure, Explorations in the New Monetary Economics, Risk and Business Cycles, Economic Welfare, and New Theories of Market Failure.

Reviews

[David Rubenstein · Rating 5 out of 5]

I enjoyed this book immensely! The title is very misleading--it is not about economics from a sociology perspective, but about applying rational, logical thinking to everyday (and not so-everyday) situations. In this book, Tyler Cowen describes how one might better enjoy going to an art gallery. In each room in the gallery, pretend to be an art thief--choose the single art object that you would prefer to own yourself, above all others. Think critically about why you would prefer it.

Cowen describes how one might better enjoy reading a book, especially a difficult, complex fiction book. He suggests that skipping around in a complex fiction book can actually be beneficial, and help one to understand the story better! Read the first fifty pages three times. And don't feel compelled to finish a book that you don't like.

Cowen describes how one might better enjoy music, how to cope best with kidnapping and torture, and a visit to the dentist. If you are a foodie, he offers interesting advice on what dishes to prepare at home vs. what to try at restaurants, and how to find good restaurants. Go to a neighborhood with low rents, or even food stalls that have low overhead. Go to a neighborhood--or a country--with the greatest differential between the wealthiest and the poorest residents. The wealthiest residents are the pickiest eaters, and the poorest residents will be the cooks.

How should one contribute to charity? How should one treat beggars on the street? How should one tip at restaurants? How should you attend movies? What sort of gifts should one give?

The topics covered in this book do tend to jump around a lot, but the sheer diversity of situations make this book very compelling, even if Cowen's advice is simply his personal opinion. Much of his advice is humorous and non-intuitive, but he backs up his advice with clear, logical explanations.

[Julie · Rating 2 out of 5]

Well, I thought this was going to tell me how to use incentives on _myself_ to get me to do the things I should be doing. And it was disappointing in that it did not tell me how to do that. I can't say it really did too much of what the subtitle said either. How to motivate your dentist? Compliment them on a job well done, and give them Christmas presents.

I think the author revealed far more about himself than he did about economics. He takes pride in seeing like 40 movies a year, and walking out on most of them. Not because they're bad, per se, but just because he feels his time is better spent elsewhere after he's gotten a feel for what the movie's like. Umm...

And he tells you how to get yourself to appreciate art. And where to find the best food.

Where he was really starting to lose me was when he started talking about how to get yourself to appreciate fine literature. I'm sorry, but if you have to trick yourself into appreciating a book.. by skipping around, reading the best bits, playing games with yourself, and reading the Cliffsnotes.. then, it's probably not a very good book, is it? Why waste your time at all? You could watch the movie version if you feel culturally deprived.

Or, well, you could at least watch _part_ of the movie, and then walk out on it.

Working hard to appreciate art, food, music, books, movies? What's the point? Do you feel better about yourself? If it's worth your time to pay attention to, don't take shortcuts! Watch the whole freaking movie. Reading the whole freaking book!

He's also got a chapter on 'signaling'. How a programmer could best land a job by signaling he's awesome by _not_ wearing a tie. Is this about signaling? Is this about image? If you do this consciously, seems to me, you're going to fail. The programmer shows up in geeky attire, because that's who he _is_. The only thing he's signaling is 'take me as I am, or I don't want to work for your company'. Not 'I am so super-awesome that I don't have to wear a suit and tie, which will prove to you that I'm super-awesome. If I'd worn a suit and tie, you'd know I wasn't super-awesome'.

Anyway.. yea.. I think I could fill blog posts arguing with this author. But, hey, it's not worth my time!

[Terrie · Rating 1 out of 5]

What a thorough disappointment. I love books in this genre, so I was really surprised not to enjoy this one. The writing and subject matter was very ADD, jumping all over the place. The only chapter that really tied to economics was the penultimate on charitable giving. No real insights here.

[Milad · Rating 4 out of 5]

I’ve seen some reviewers lament that this book is a disorganized hodgepodge of random topics that reads more like a collection of blog posts than a book. I can’t really deny that. That said, I’d argue the following themes run throughout: (1) a response to economists who treat people like utility maximizing robots and try to infect every facet of human life with markets (2) an exploration of signaling and self-deception (3) self-help advice.

This book is, partially, a reaction to other pop economics writers, such as Steven Landsburg. For example, in “More Sex is Safe Sex,” Landsburg says we can “fight fires” by compensating fire fighters with property they save and “prevent accidents” by holding everyone within a certain radius of an accident financially liable. Cowen rejects this sort of “use markets for everything” advice as misguided in certain contexts.

For example, in his chapter on using incentives, he notes that paying your spouse by the pound to lose weight is probably not a good idea. She’d be pissed off. Cowen says the following conditions should hold before we resort to monetary penalties / rewards: (1) performance is highly responsive to effort (2) intrinsic motivation is weak and (3) receiving money for a task produces social approval. He argues that monetary incentives are especially inappropriate when applied to people who feel like they’ve lost control (like a spouse living in a “eat a Twinkie, pay a dollar” scheme would). These rules are applied to situations ranging from motivating your dentist to motivating a tour guide in Marrakesh.

His chapter on the “seven deadly sins” is a compilation of eccentric markets where something about the exchanges strikes us as socially inappropriate. Examples: services to pay someone else to break up with one’s significant other, a $34 alibi for adulterers, Prince Charles’s butler who applies toothpaste to his toothbrush for him, etc. Fans of Cowen’s blog with notice some of these from his “Markets in Everything” updates.

The material on signaling runs the gamut of topics: women appreciate flowers and diamonds (products of little intrinsic value to men) because they signal a man’s care, a Harvard B-school education doesn’t really teach you much but signals intelligence, etc. This chapter (predictably) features a heavy dose of Robin Hanson, since he views virtually everything we do as signaling – a large chunk of health care expenditures don’t improve health outcomes and merely signal our dedication to someone (e.g. a zillion tests / procedures for someone with a certain and imminent death), charitable donors are often signaling that they’re good people instead of actually helping, politics often merely signals affiliation with a certain group, etc. The chapter also discusses counter-signaling. For example, Cowen suggests that we keep good news to ourselves. Those boasting about good news are signaling they have something to prove, and staying quiet can be an effective countersignal. He also discusses counter-signaling in the context of job interviews and dating.

On self-deception, Cowen notes that a disproportionate percentage of people think they’re above average intelligence, above average drivers, etc. This tendency is especially destructive in politics. As noted in the incentives chapter, we love control. Instead of high NPV investments in medical research and more targeted expenditures, we try to medically insure everyone. In the words of a commenter on his blog, “we can’t let anyone die.” In the words of Cowen, feeling we’re in control is our greatest self-delusion.

The self-help advice also runs the gamut: what to order at restaurants (covered more extensively in his book on food), hyper-specific and unrealistic material (e.g., signaling you’re a clueless civilian in case you’re captured for torture), etc. However, my favorite material in the book was his advice on how to be a “cultural billionaire.” As anyone who reads Cowen knows, he has a remarkable ability to absorb culture. As he notes, in the modern US, money isn’t our relevant constraint for cultural consumption. A Netflix account is $10, your local library is full of great books, and you can consume plenty of free music on the Internet. The relevant scarcity is time and attention. Cowen’s advice for people to enjoy art more is to embrace the “Me Factor.” Most of us space out at an art museum. Art is ultimately about self-absorption. We need to relate museum art back to ourselves. Cowen’s advice is to pretend you’re a thief and ask which artwork you’d steal and why. That’d keep us engaged. With music, Cowen argues that most people have the opposite problem. In order to be cultural billionaires, they need to tone down the “Me Factor.” He notes that you can predict someone’s music taste with a few facts. 22 year old black male from inner city Detroit? Rap. Cowen notes that there are no genetic reasons we should prefer one genre over another. We’re merely fitting our lives to a broader “story” (e.g., the country music fan’s personal story of herself as a southern white female). Cowen suggests engaging other genres, such as world music. Cowen also suggests realizing sunk costs. Part of the reason he can consume so much information is that he cuts his losses: he finishes only 1 out of 10 books he starts and will go see chunks of 3 movies in an afternoon. To the traditional economist, sitting through a movie after we’re not getting anything out of it seems like an irrational sunk cost fallacy. From a more behavioral lens though, our choices are part of a broader narrative that we’ve bought into (e.g., I have to stay at this terrible hipster concert! I’m a hipster!).

Cowen’s advice on charity is counterintuitive. He argues that giving charity can be counterproductive. For example, if you give $50 to someone on the street in Calcutta, you encourage up to $49 in effort to “exhaust those rents.” In human terms, this is why many poor Indians pay for painful procedures to look like more sympathetic beggars (e.g., a missing limb). To avoid these sorts of unintended consequences, Cowen suggests giving charity to poor people who aren’t expecting it. This chapter also presents an optimistic take on micro-credit and a possible argument for giving to high profile causes - if there’s a short supply of “people who care”, Bono’s visible giving can encourage more tsunami relief. Another nugget of advice: don't tip above 15% in America. Anyone in America is relatively wealthy so send anything above 15% to the Third World. The chapter also explores why people don't like gifts of straight cash from loved ones. To an economist, $10 in cash is more valuable than $10 in-kind (the recipient has a better sense of what he values, cash is more liquid, etc.). Once again, gift giving is a signal of caring: good gifts signal a personal attachment to loved ones and a skill in picking out gifts.

A few thoughts on the book:

(1) There is a tension that runs through “Discover your Inner Economist.” On the one hand, Cowen presents our self-delusions, irrationality, etc. as barriers to sound economic decision making. And his book attempts to give us advice to make better decisions. On the other hand, Cowen embraces the irrationality as what makes us human. The chapter on self-deception mentions “depressive realism” – people more in touch with reality are often depressed. The delusional are often happy. Cowen celebrates self-delusion – thinking we’re more important than we really are encourages us to do great things. Cowen also celebrates signaling in a sense. He notes that Robin Hanson’s alternative universe where we don’t have to constantly signal with flowers, college degrees, political affiliations, etc. is one where we’ll all merely computer uploads. This is, for Cowen, an austere vision.
(2) It’s rare for a market-oriented economist like Cowen to see human beings as self-deluded and irrational. The behavioral economists tend to lean left. Pro-market economists have historically tended to present man as homo economicus. 90% of the content has nothing to do with libertarianism or public policy, but Cowen does inject the occasional libertarian commentary. In his discussion of using monetary incentives as motivators and why that doesn’t always work, he notes that the difficulty in determining when monetary incentives do and do not work is a strike against government regulation (this seems particular relevant in discussions about executive compensation). His discussion of self-delusion notes the particularly destructive impact of self-delusion in political decision making (specifically: health care policy, pandemic preparation, and counterterrorism). In censuring eccentric “markets in everything”, he notes that he does not think they should be banned. He argues that bans create black markets and that making mistakes is an indispensable part of freedom.
(3) Though Mises does not get a citation here, the work seems to borrow from him. His tome “Human Action” focused on the “logic of choice.” Mises thought it was insufficient to look at what man did and that economists must understand why man acted. Cowen, likewise, tries to make our decisions in all facets of life intelligible here by looking back at our psychological motivations.
(4) Much of the book, such as the portion on Neil Strauss’s “The Game” and the part about why we’re not having more sex if it’s our favorite activity, is covered on Cowen’s blog. And it’s covered with more depth on the blog, since this is a book for the general reader. Moreover, some of the topics presented get a fuller treatment in Cowen’s other books – the food chapter is in his later book on food, the material on “stories” is in his “Create your Own Economy”, etc. Also, fans of Robin Hanson’s blog will see a lot of things they’ve already read. All that being said, this Freakonomics-genre book was funny and intellectually stimulating throughout. So I’d recommend it.

[Debbie · Rating 1 out of 5]

Cowen seems more eager to show us just how awesome and worldly he is than to help us discover our inner economist (not to mention that the title is overly self-help-y).

Then I reached this paragraph:
"When should we finish a book we have started?...Is this book the best possible book I can be reading right now, of all the books in the world?...Whatever is that best possible book to be reading, I am willing to buy it or otherwise track it down. Most other books don't make the cut."

Sorry Mr. Cowen, but yours didn't make the cut.

[Carl · Rating 5 out of 5]

This is the closest thing to economics-as-organizing-life-philosophy that I've read. It was particularly validating to read a book written by somone who obviously thinks about the seemingly trivial (tipping, gift giving, consumption of culture, what to eat in restaurants vs what to make at home) as analytically as I feel I do. There are some bold ideas to be found in here to be sure and I'm going to keep this book at eye level on my bookshelf because I know I will want to reread a chapter at a time. Cowen is an avowed polymath and thus one of the more interesting chapters was on how to become a 'cultural billionaire', that is, how to get the most out of the abundance of culture to be enjoyed in our society. Out of 10 books he picks up, he finishes 1. He'll play games in art museums imagining that he can take home one piece from each room so that his attention remains heightened. He'll go to the multiplex and see bits and pieces of 4 movies in one afternoon. I wasn't surprised in the least that I liked this book so much because this guy writes one of the more interesting economics blogs out there, MarginalRevolution.com.

[Elyssa · Rating 3 out of 5]

I chose to read this book after reading a review of it in New York magazine. I was hoping for more, but I appreciated the book's overall premise and did learn a few new concepts. Most interesting was learning what truly gratifies people (it's not money), how to best enjoy culture, how to order from restuarants, the power of self-deception, and how to be a better altruist. The book meanders and seems to lack a solid structure. It wasn't hard to follow, but I found it annoying. In the end, my "inner economist" tells me that re-reading the review and finding some other articles and reviews of this book might have been a better use of my limited reading time.

[Cathy · Rating 1 out of 5]

First, in the interest of full disclosure, I didn't finish this book. Tyler Cowen is apparently attempting to emulate the success of books like "Blink" and "Freakonomics" but in my opinion, fails miserably. It's apparent that the author only wants to tell us about how wonderful he is using examples from his life whereever possible. When he boasted about only finishing-at most-one book of every ten he picks up, I took that as permission to stop wasting my time with this tiresome braggart and let HIS book remain unfinished.

[Julia Wise · Rating 3 out of 5]

An assortment of advice about how to think about different topics, some of which is genuinely using an economic lens, but some of which is more like his random opinions. I'm a fan of his podcast and was hoping this would be more of an overarching philosophy.

The chapter on food is a shorter version of "An Economist Gets Lunch," if you want to try out that kind of content before reading the full book.
I was annoyed by the number of references how cultured and well-traveled he is, to how he and his colleagues are more rational than their family members.

[Bharadwaj Machiraju · Rating 4 out of 5]

I've been exploring Marginal Revolution lately and stumbled upon this book. A concise, compelling, and thought-provoking read that presents diverse perspectives on a few everyday dilemmas. Though neither a culinary enthusiast nor an art connoisseur, I still found it thoroughly enjoyable.

[Adam Ashton · Rating 5 out of 5]

Enjoyable and entertaining read with some real world applications of text book concepts. Learnt more about economics in the introduction of this book than I did in a 3 year economics degree

[Toe · Rating 1 out of 5]

Objective Summary

Cowen discusses widely disparate topics using insights from economics. Here are some of his points:

• Incentives and scarcity drive economic analysis more than money.
• Money is an effective incentive when performance at a task is highly responsive to extra effort, such as clerical work. Money is effective when intrinsic motivation is weak.
• People prefer to feel in control of situations even if actually having control increases risk.
• The best food is found in places where there is high income inequality because the rich delight in delicious food, and the cost of labor is low enough to make the efforts of the poor worthwhile.
• When ordering food in restaurants, choose the dish that sounds the least appealing because the chef has probably made it taste very good in order to overcome its menu description.
• Go off the beaten path for the best food value. Avoid the long North/South Avenues in NYC, and frequent the low-rent suburban strip malls with the hole-in-the-wall Asian diner.
• Flattering people may make them provide you with higher quality service.
• Diplomats from different countries to the UN received vastly different numbers of parking violations even though they had diplomatic immunity and never had to pay a financial price. Diplomats from Canada, Australia, and Western Europe received far fewer parking violations than diplomats from Africa and the Middle East. This is because cultures respect the rule of law to varying degrees.
• The cost of gifts often exceed their value to recipients.
• When visiting a museum, ask yourself in each room which piece you would take home if you could choose only one. This will keep your attention, the scarce resource in this scenario, focused on yourself and make the museum a game.
• You can find more music you’d like by exploring existing music from different eras rather than just awaiting the newest releases.
• People signal their sexual value indirectly through displays of wealth, knowledge, and humor rather than directly propositioning others.
• Giving to charities may not be effective and could be harmful by preventing the development of productive economic activity.


Subjective Thoughts

This book has problems. First, Cowen wasted my time. He subjected me to economic inefficiency by saying nothing that was new, interesting, or important. He hedged every assertion into a tautology or common sense. I challenge anyone to tell me one useful takeaway from the sections on dating or how to behave in the face of torture from bad guys.

Second, this book overpromised and under-delivered. It was a wannabe Freakonomics without a single lasting takeaway. It reads like a collection of potentially interesting topics with no meaningful analysis or conclusions. Cowen touches on food, sex, business meetings, art, torture, music, travel, love, dating advice, charity, gift giving, doing the dishes, and more. Cool, I’m interested in all those topics. What insightful lessons have you got for me, Cowen? None, it turns out. Half-baked ideas breezed through may make for good marketing or an appealing cover, but it does not make a good book.

Third, his analysis was imprecise, incomplete, or flawed to such an extent that I questioned his credibility. In one chapter in particular, he discusses how people prefer to be in control. He gives the example of people afraid to fly but not drive even though flying is safer. He immediately follows that observation with this hypothetical scenario: “A deadly influenza virus comes from Asia to our shores. There is no cure, and doctors estimate that a person’s chance of dying a horrible and painful death from the virus is 10 percent. A vaccine is available, made from a weakened form of the virus. The vaccine cures most people, but kills 5 percent of them.” How should the economically rational behave: Should he take the vaccine or not? Cowen asserts, “Clearly it is better to take the vaccine.” But, he goes on to inform us, many highly educated people state in surveys that they would not take the vaccine. Cowen thinks it is because they fear taking the action that could potentially cause their own demise. Fine, but that is the exact opposite of what he just told us earlier about them wanting to take control by driving rather than flying. And there is no reconciliation by Cowen between these two contradictory observations. Do people want control or do they fear taking control? He just vomits undigested observations onto the page.

Even worse, in the hypo Cowen posed, he failed to account for the very real possibility that the respondents were assuming a probability less than 1 that they would ever contract the flu. Quick internet research informs me that the probability of an individual contracting the flu in any given year is between 5% and 20%. So if there is a 10% chance that I will die after I contract this hypothetical flu but only a 20% chance that I will contract it in the first place, then the rational response, assuming I want to live, is not to take the vaccine. This is because I would have a higher chance of dying from the vaccine (5%) than just taking my chances out in the wild (10% * 20% = 2%). In addition, perhaps I could further reduce the likelihood of contracting the flu by taking a lot of time off work and avoiding public places. Thus, the rational response depends entirely on the probability one assigns to contracting the flu at all, and that probability is not clearly stated in the hypo. If it was clearly stated, then the hypo would boil down to: Would you rather have a 10% chance of dying or a 5% chance of dying. Not an interesting question to explore. So Cowen uses a poorly worded hypothetical to reach an incorrect conclusion that directly contradicts an earlier conclusion he just made. That is this book in a nutshell, but I have one more criticism for the sake of completeness.

Fourth, I couldn’t help noticing that Cowen kept interjecting himself enthusiastically and needlessly into the conversation. For a book that is not an autobiography, he talks a lot about himself, his travels, and his love of food. So much so that I almost felt I was reading his diary. I would hate to share a beverage with him even though he is probably full of fun facts and I love to learn. Here are some of his more annoying statements:

• “My personal story is that of a curious intellectual nerd polymath, loving husband and stepdad, and music lover and collector of Mexican Outsider Art, among other qualities.”
• “I’ve written about restaurants near my home in northern Virginia for years. While my ‘Ethnic Dining Guide,’ as I call it, is far from complete, my reviews fill more than one hundred pages of single-spaced text.”
• “If asked, ‘What do you mean by best?’ I simply respond, ‘Best. I am a Platonist. [This, of course, refers to Plato’s theories of the forms, as expressed in the dialogue The Republic, which explains the idea of an absolute, perfect truth, as might be found in the heavens.] Best, as in Best. I want The Best.’”
• “I am the family cook. As the family cook, I take a real interest in cooking the right way, and the healthy way.”
• “I have traveled to about seventy foreign countries, including five trips to Haiti, a trip around West Africa, and about a dozen trips to rural Mexico.”
• “I think of this entire book as a guide to helping yourself in a socially responsible manner and thus as a guide to helping other people.”

Jesus. I need a shower to wash the douchebaggery off me after reading those sentences.

Perhaps I’m overly harsh. But I am willing to be proven wrong. So anyone who just finished this book, please tell me what incentives you would use to fall in love, survive your next meeting, or motivate your dentist. I just finished it, and I cannot tell you. And these promises are the subtitle of the book. My best attempt at Cowen’s answer is you should flatter your dentist. My answer would be to move on to another dentist. In the meantime, I’ll be happily moving on to another book that cannot be much worse than this one.


Memorable Quotes

“The central concept of economics is not money but rather incentives. Quite simply, an incentive is anything that motivates human behavior, or encourages an individual to make one decision rather than another. An incentive can be money, but it can also be a tip, a smile, or an act of praise. An incentive can be a promise of lifelong devotion.”

“Here are three principles for distinguishing good economics from bad.
1. The Postcard Test – It should be possible to take a good economics argument and write it out on the back of a moderate-sized postcard.
2. The Grandma Test – Most economic arguments ought to be intelligible to your grandmother.
3. The Aha Principle – The Aha Principle is an extension of the Grandma Test. If the basic concepts are presented well, economics should make sense.”

“Long-term disability leave is up 20 percent since 1990, yet overall, Norwegians are becoming healthier, not sicker.”

“One of the least-heralded virtues of capitalism is how it blends and melds different kinds and mixes of rewards and penalties. Capitalism is not just dollars, dollars, and more dollars. It is also the best system for mobilizing intrinsic motivations toward the greater good of mankind.”

“A good intuitive economist approaches a practical problem by asking ‘What is the relevant scarcity hindering a better outcome?’”

“Cultural commentator James Twitchell has offered a list of just this kind of overexposed artwork:
1. The Mona Lisa
2. Grant Wood’s American Gothic
3. Washington Crossing the Delaware
4. Michelangelo’s David
5. Whistler’s Mother
6. Much’s The Scream”

“The key to doing well is to keep our self-deception as a general buffer, but to overcome it selectively for specific problems.”

“Many children don’t study hard for tests, so they can have an excuse if they don’t do well. We put our egos on the line when we try hard.”

“The typical American has intercourse two or three times a month. Married people have more sex on average.”

“He found that most of us do not value the gifts we receive in proportion to what was spent. In percentage terms, if we exclude cash gifts, Waldfogel found that people value their gifts at 83.9 percent of their cost. This figure was derived from a survey, and frankly I think most of the respondents were lying. I would be surprised if the true average valuation was 40 percent of what was spent. But if we take Waldfogel’s very conservative estimate as given, the ‘deadweight loss’ of gift-giving runs to at least $4 billion a year. . . . These loss estimates fail to account for the time spent buying gifts, which can run many hours.”

“The market economy and capitalism are among the greatest enablers of civilization. Our lives are comfortable instead of wracked with hard physical labor, chronic malnutrition, and massive losses of women and babies during childbirth, to cite just a few features of earlier times. Whether our political views are right-wing, left-wing, or elsewhere on the spectrum, we can agree on these facts.”

“The West has succeeded as much as it has because it embraced the values of self-criticism, individual rights, science, and the idea that government is the servant of the people, not vice versa.”

“Just as culture often relies on markets, so do markets require cultural foundations.”

[Jeremy · Rating 3 out of 5]

The subtitle of the book is quite misleading. There are maybe two sentences about motivating your dentist. The bulk of the book focused on self-improvement through culture: art, music, cuisine and literature. It did contain some pretty radical ideas worth thinking about, and I laughed most of the way through. Apparently the author only finishes about 10% of the books he starts, but he argues that this is okay because it means that at any given moment he feels like he’s reading the best possible book available to him at that time. He also suggests that if you want to know the truth about what someone thinks, don’t ask them what they think, ask them what they believe most other people think. Pretty interesting.

Quotes:

Anyone who walks around Sweden or Norway will notice an especially tall, vital, and indeed healthy population. Scandinavian rates of longevity are among the highest in the world. Yet a recent study showed that about 25 percent of Norway’s workers are absent from work on an average day. Usually they are “sick,” they are “undergoing rehabilitation,” or they are on long-term disability. The rate of absenteeism is especially high for government employees, who constitute about half the workforce. The otherwise cooperative Scandinavians think nothing of deciding to just stay at home. In Norway chronic absenteeism encounters few penalties. The first year of sick leave often meets with full pay for a year and 60 percent pay the second year. If an employee is fired, unemployment benefits are long and generous. Long-term disability leave is up 20 percent since 1990, yet overall, Norwegians are becoming healthier, not sicker.

Many people have deeply seated emotional reasons for being late. Being early or on time sets them up for disappointment if the other person is tardy. Sitting alone and waiting is experienced as a painful rejection. To prevent this humiliation it is necessary to be late. Lateness is a preemptive rejection of the other person before the latecomer has the chance to feel any pain or even any anticipation of pain. But what if both people have this complex?

A good intuitive economist approaches a practical problem by asking “What is the relevant scarcity hindering a better outcome?”

The best gifts are often those that we, as gift-givers, do not ourselves value very much. Such gifts show we value the gift receiver, even if diamonds really are a waste of money.

Since doctors kill as many people as they save, we would live just as long without them. That sounds crazy, but the data show no correlation, either internationally or domestically, between health-care expenditures and life expectancy.

On economic issues, few voters defer to the opinions of expert economists when it comes to technical questions such as the benefits of free trade. This reluctance to defer does not appear to be a well-grounded suspicion of experts. Many citizens are deliberately dismissive, stubborn, and irrational in their points of view. At the same time these people maintain a passionate self-righteousness.

Prince Charles…still has his butler apply toothpaste to his toothbrush.

The typical American has intercourse two or three times a month. Married people have more sex on average.

[Catherine Gillespie · Rating 3 out of 5]

Tyler Cowen’s book Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist didn’t teach me anything new about love, meetings, or manipulating my dentist, but it was an interesting manifesto of sorts. Since the book was written by an economist, his musings on various facets of life have a sort of econ feel, even if I didn’t really find it to be all that life-changing.

Cowen is interested in the various sorts of incentives we use and are motivated by, and the book is his attempt to link lots of bits of life to incentives (monetary and otherwise). While Cowen’s thoughts on how to pick an ethnic restaurant or how to best devote our charitable giving were interesting, I can’t say that I finished the book feeling like I knew much more econ than I did previously.

{Read my full review here}

[jlf · Rating 3 out of 5]

Eh... I think I've read too many books like this recently, so this one was just kind of meh. Given that I look at Marginal Revolution a few times a day, nothing that I read was especially novel. Also, since I am a completely different sort of person than Tyler Cowen, I had very little interest in a good chunk of the book. I have no interest in becoming a "cultural billionaire"-- while I am not proud of being a Philistine, I'm pretty comfortable with who i am, and I am the sort of person who has no interest in high culture or experiencing new things just to experience them. I felt like I was reading a book that was not only written for someone else entirely, but written for a someone else that I would not particularly like.

[Ezra · Rating 1 out of 5]

Only 80 pages in and I strongly disagreed with 5 assumptions, methods, and conclusions. Not as interesting as assumed it would be I when bought it. I wanted a book on how to think. Instead I got a random collection anecdotes on how to live which seemed severely flawed.

[Yvensong · Rating 2 out of 5]

Ok. I've given this book more than it's fair chance to wow me. There were some bits and pieces that were interesting, but not enough to keep me reading, so as he practices, I will spend my time elsewhere, doing something I consider a better use of my time.

[Josh]

This book looks great, like "Freakonomics" only with a more How-To bent. Too bad I'm so cheap that I'll have to wait until it comes out in paperback.

[Ben Landrum · Rating 4 out of 5]

I read this because I encountered the below quote in a context about people putting PhD in their name on Twitter:

If a book lists 'Ph.D.' after the author’s name, be wary. The author needs those letters to signal his importance. It usually means the author is not used to interacting with peers, is appealing to the gullible, or is making questionable claims. Stephen Hawking does not use those three letters.

Being well raised, I've always found putting letters after your name gauche. As referenced by Cowen, you don't go out of your way to promote these things among people with comparable credentials, because nobody would ever care. The intent therefore is to elevate yourself above hoi polloi and suggest that you're some kind of sophisticated ivory-towered intellectual with privileged takes.

I'm sympathetic to the narrative that some people do these things because they're very proud of their academic achievement. Good for them! I support them in their pursuit of an education, and I hope the time they spent getting degrees was transformative. That being said, pride is a sin for a reason. I think it would be more constructive for these people to invest in some gilded frames and put together a nice shrine to all the good grades they once earned. An unreasonable attachment to peacocking with the graduate equivalent of a high school athlete's varsity jacket is unsightly.

I think a major component of what these people are doing is making the degree itself a core component of their identity, and using that to feel exceptional. In the case of a PhD, this is obviously absurd. A PhD means very different things across disciplines and cultures, and in many cases, the bar is embarrassingly low. If you wanted to add something to your Twitter bio about your PhD in x area from institution y, it would be a grey area piece of biographical information, and might situate your commentary on topics relevant to x for people who care about your bona fides. But next to your name? Where it can browbeat anyone who sees anything you say? Obviously compensating for something.

He has a chapter on related status signaling that's pretty good. The whole book is really pretty good, as you would expect from a successful blogger. I was desperately trying to place where I knew the name Tyler Cowen from until he mentioned "Tyler Cowen's Ethnic Dining Guide", a blog with reviews of DC-area restaurants that I've had bookmarked since just before I left for India, and therefore never really had the opportunity to use. He says some very interesting things about ethnic restaurants in this book, most saliently that restaurants you would go to as a tourist benefit greatly from income inequality, because it creates a market for fine dining and makes labor intensive food prep cost-effective. He attributes the abundance of French chefs in NYC to the presence of migrant labor that makes haute cuisine cost-effective, which I suspect is probably more about Europeans being poorer and fine dining being a bit saturated in France, but an interesting idea. On a related note, he recommends cooking healthy and avoiding exotic specialty dishes, because restaurants have a huge comparative advantage in unhealthy and difficult to learn things. The whole chapter on restaurants is worth reading.

[Hamish]

Some notes from Tyler Cowen on EconTalk:
- A good strategy for appreciating museums and art galleries is to ask yourself "what item would I like to bring home with me?" I wonder how far you can take this. Certainly you could do it in other kinds of spaces to be more attentive (other people's homes, workplaces, etc), but can you also do it with people? (Who would I like to have as a flatmate? Have a talk over dinner with?) Perhaps you could even use it with life experience. (Which part of this person's autobiography would I like to live through in an experience machine?)
- Which is better: inflation, deflation, or a constant monetary base? A benefit of a fixed money supply benefit for economists is that they could see the real effects of growth as prices fall. Milton Friedman has suggested that the money supply should grow with the economy so that prices stay constant. Cowen thinks that inflation is best because it allows everyone who isn't pulling their weight to have their real wage to steadily go to zero without having to go through the moral deflation of taking a pay cut.
- Why does any kind of food restriction seem to help with weight loss? If you have a map of indifference curves, then any restriction will limit your optimal choice bundles and you'll consume less food. I'm don't understand this, but it sounds legit.

[Cam · Rating 3 out of 5]

Cowen's desultory style of thinking, which makes him such a great blogger and interviewer, makes his books a little frustrating. They are often too disconnected, perhaps with the exception of Stubborn Attachments.

The best way to read this book, as Cowen would recommend, is to jump around and read a few pages here and there. I enjoyed the part on signalling theory, where he flirts with Robin Hanson's views. Although he doesn't completely endorse or refute it. I also liked his advice on how to get more from art museums, where to eat, and how to read a book (many of which you'll also find as small blogposts on Marginal Revolution).

Whatever the situation, Cowen instinctively ponders on what incentives are at play. You should attempt to apply the Cowenian lens in your own life. Next time you're at an extended family dinner, a quiz night with your colleagues, the zoo, or anywhere really, reflect on how incentives, marginal thinking, and efficiencies are in play. This can either be a mere fun curiosity or you can take advantage and potentially save time, money, or face.

[Y · Rating 4 out of 5]

A very Tyler Cowen (polymath/economist/cultural observer/blogger) book! Enjoyed it a lot.

He describes a constellation of diverse facts orbiting around a central theme in his chapters. Then there is a thread holding it together hidden in the background. Tyler was kind enough to provide clues regarding that thread in his conclusion. I think this way of building the book makes it highly re-readable for new insights (just had that experience with a chapter of his "The Age of the Infovore"). I can also see how some people would get the impression of not getting what the book is about or that it's just a bunch of facts thrown together for that same reason and end up putting it down or finishing it but feeling like they didn't get much out of it.

Not sure it's a full 4, but it certainly deserves better than the 3.4 average it has now.

[Luis · Rating 5 out of 5]

I didnt like it at the beggining, for i thought it was gonna be the same as the other pop books of economics. However, I discovered the author had a very charismatic approach. Nothing new here, but definitely a worthy reading to make me internalize by reading over and over again, from different perspectives the notions of behavioural economics. I liked about the author that he seems way intuitive, and usually explores themes that I REALLY like, departing from usual economics and more about motivation in families, interpersonal relationships and incentives in quite different areas than standard economics.

[Tina · Rating 4 out of 5]

I enjoy books that offer me ideas I haven't heard before or that present new ways of thinking about the world, and this book does both.

I don't read economics books, so I don't know how this one compares to other books in that genre. I categorize the book (in my inexperienced opinion) as a cross between economics and psychology. (I read a lot in the area of psychology.)

I can say whom this book might appeal to, but if you can find it cheaply or in your local library, I'd say check it out, if nothing else, to see if there are some new ideas that you can use.

[Jason · Rating 2 out of 5]

I like Tyler Cowen's writings - his blog is very interesting - but this book felt like a swing and a miss. Cowen spends a lot of time in this book teaching you how to appreciate fine art, listen to more classical music, and read books - it felt more like teaching someone how to turn into an aristocrat or, at the minimum, how to have the same tastes and preferences that Cowen has than how to discover my inner economist. An interesting book but one that deviated very quickly from its title and its premise.

[Tim Watts · Rating 4 out of 5]

“Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist”, Tyler Cowen
August 24th, 2009 · Economics, Non-Fiction

Synopsis: The greatest economics writer in the blogosphere switches medium to offer an extended treatise on the use of economic principles to improve the non-economic aspects of your life. Utility is maximised.

My Take: Tyler Cowen’s blog, Marginal Revolution, is hands down one of the best blogs on the ‘net. Not because he is the best economist online today (Greg Mankiw, Dani Rodrick, Paul Krugman, Steven Levitt and Gary Becker/Richard Posner would all have claims here), but because his personality is so perfectly suited to the medium. Instead of producing worthy and dry pieces of brilliant economic analysis, Cowen’s approach to Marginal Revolution is that of a cultural Bower Bird; collecting and displaying fascinating titbits from both his professional and cultural interests. The New York Times describes Cowen as:

a world-class polymath who whips through graphic novels and 816-page bricks like Africa: A Biography of the Continent, listens to everything from Bach to Brazilian techno, searches out exotic cuisines all over the world, and still finds time to travel to remotest Mexico to update his collection of amate painting. For him, deep immersion in culture defines the good life, and his readers get the vicarious benefits.

Cowen successfully translates this eclectic mix of rigorous classical economics and cultural diversity into the literary world via “Discover Your Inner Economist”. In DYIE, Cowen takes a more in-depth look at his cultural preoccupations through the prism of economic analysis and with an eye to maximising utility. As he puts it:

“Economics developed out of a recognition of the fact that many things worth having don’t just fall into our laps in the course of our everyday lives… The real purpose of economics is to get more of the good stuff in life.”

Cowen’s overarching insight into our cultural lives is illuminating. For him:

“The critical economic problem is scarcity. Money is scarce, but in most things the scarcity of time, attention, and caring is more important.”

Once you accept that there are limits to most people’s (ie non-professionals) interest in the arts and capacity to pursue this interest, the question then becomes how an individual can most efficiently maximise their enjoyment of culture within these constraints.

Again, Cowen’s insights into how one could go about this are both useful. Take his approach to art appreciation. Cowen begins by acknowledging the relevant constraint:

“Our time and attention is scarce. Art is not that important to us, no matter what we might like to believe… Our love of art is often quite temporary, dependent upon our moods, and our love of art is subservient to our demand for a positive self image. How we look at art should account for those imperfections and work around them. “

Keep in mind that books, like art museums, are not always geared to the desires of the reader. Maybe we think we are supposed to like tough books, but are we? Who says? Many writers (and art museums) produce for quite a small subsample of the… public.

So how should we go about maximising our attention and making most efficient use of our time:

“In each room, ask yourself which picture you would take home – if you could take just one – and why? This forces you to keep thinking critically about the displays. If the alarm system was shut down and the guards went away, should I carry home the Cezanne, the Manet, or the Renois? In a room of Egyptian antiquities, which one caught my eye? And why? We should discuss the question with our companion.

To put it crudely, we must force ourselves to keep on paying attention. Ranking the pictures focuses our attention on our favourites. It also focuses our attention on ourselves, which is in fact our favourite topic….

…

At the end of the visit, ask which paintings stuck with you. Did you find yourself thinking back on the Munch, the Pollock, or the medieval tapestries? A week later ask the same question. Then go read about those artists or that period. That is a more useful procedure than reading about art in advance.

We should view paintings repeatedly, but especially after we have spent time with other artworks. The best way to understand one art museum is to go see another art museum with a related but not identical collection.

As someone who has always diligently tried to broaden my cultural horizons at every opportunity, it resonated with me that ironically, the best way to do so was to narrow your initial focus in a new direction and then expand from a beach head of new knowledge. It’s also liberating to see how this isn’t simply a lazy or selfish approach to high culture, but rather a utility maximising approach to cultural enlightenment.

Highly recommended for anyone wanting to enrich their cultural life.

Highlight:

“We must ignore the carping of the sophisticates. Well-educated critics may claim that pictures cannot be ranked, value is multidimensional or subjective, or that such talk, represents a totalising, colonising, possessive, post-capitalist, hegemonic Western imperialist approach. All of those missives are beside the point.

When it comes to the arts, dealing with the scarcity of our attention is more important than anything, including respecting the artists.”

[Erica · Rating 3 out of 5]

An interesting read if you like this sort of thing. Cowen uses basic economic principles to discuss cultural consumption, charitable giving, dating, and other areas of life. Many of the ideas as well as the unique voice will be familiar to readers of his blog, Marginal Revolution. Cowen has a thoughtful and provocative outlook, although whether it provokes enlightenment or annoyance probably depends on the reader.

[John Breeden · Rating 2 out of 5]

Cowen took what would've been a wonderful essay on the importance of incentives in economic decision making and daily rational thought, then attempted to transform it into an easy bestseller. The content was very repetitive and anecdotal. There are certainly some great ideas and perspective to be gained but it's covered in a myriad of unnecessary thought experiments.

[Jerry Smith · Rating 3 out of 5]

I love Tyler Cowen. His conversations are so entertaining and informative. Look up his podcast and his appearances on others, especially the couple he did w/ Ezra Klein.
The book was pretty good. Probably more of a 3.5 than a three. His talks are better because they cover a wider variety of topics in less time.

[Xi Cheng · Rating 5 out of 5]

This book is about discovering and understanding economic (and psychological) patterns under a lot of everyday activities, ranging from art to cooking & dining to meeting, etc. It's more insightful than a lot of popular books (mystery, 'get rich quick', and snake oil) and it's more approachable than a lot of technical books (e.g. textbooks on microeconomics and behavior science).