If you need to be convinced of the ever-relevant and fascinating nature of economics, read this insightful and witty book by Tim Harford. Using one interesting example after another, The Undercover Economist demonstrates how economic reasoning — often esoteric and dull, but totally accessible in Harford’s hands — helps illuminate the world around us. Indeed, Harford’s book is a tour de force.
Jagdish Bhagwati, Professor of Economics, Columbia University; author of In Defense of Globalization
Being a considerate father, I am planning a monetary incentive scheme to improve my 18-year-old son’s marks at school. Instead of executing a relative’s bequest as decreed, I intend to spend the €7,000 rewarding good results. During three semesters, he will have to pass 48 preliminary tests, then the main exams in the fourth and last semester. How should I divide up the capital?
Robert Saverin, a grateful father
While marketers and psychologists have long known that you can fool all of the people some of the time and some of the people all of the time, it has taken economic theory a little while to catch up with the idea. Most economic models are populated by decision-makers who have more in common with the cool-headed logician Mr Spock than the impulsive and self-destructive Homer Simpson.
There are good reasons for that...
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