The subtitle of my new book is “Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist.” You can order it here.
Eugene asked me to write a few posts on the book; I thought I would start by citing an Economist.com characterization:
An earlier generation of these books, like Steven Landsburg’s The Armchair Economist and David Friedman’s Hidden Order, tackle the economic puzzles of everyday life by applying good old-fashioned price theory to novel situations. Many of the new spate of pop-econ page-turners reflect the maturation of economics as an increasingly empirical science. Freakonomics is the exemplar of this shift. But Cowen’s new book, which may seem superficially similar to old-style pop-econ, in fact integrates a great many of the insights of Levitt-style work, as well as insights from behavioral and experimental economics… Cowen’s synthesis of these new insights adds up to a level of psychological realism heretofore unseen in the pop-econ genre. If Cowen succeeds in offering excellent cute-o-nomic advice, and I think he often does, it’s because economics as a whole is now generating a more empirically adequate picture of the world. For those of us weird enough to love economics, that’s better than cute: that’s beautiful.
I would go further: we won’t make much more progress on the macro issues without first understanding the micro-complexities of everyday human life. Why are nominal wages sticky at the macro level? In the United States at least, it’s not mainly about long-term contracts or government regulation (those do play a role, however). It’s more about morale, the need for workers to feel in control of their situation, and perceptions of fairness. If you want to understand what is happening in the BLS statistics, you’re not wasting your time if you are hanging around the water cooler and listening to what people have to say.
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