A recap of last week’s Authors@Wharton Speaker Series featuring award-winning author, journalist, and radio and TV personality Stephen Dubner
Check your junk mail folder. The odds are good that there is a letter from someone claiming to be a Nigerian prince. If you just send him a small amount of money, he will send you much more later. It’s all so simple! Ignore the spelling errors; royalty obviously does not need to bother with spell check.
Of course, the Nigerian email scam is one of the oldest around, but in his new book Think Like a Freak, Stephen Dubner teams with Stephen Levitt to write a third book in the series. In this work, and during his talk with Adam Grant at authors@Wharton, the journalist examines the Nigerian scam through the eyes of an economist (Freakonomist?) to answer the question –Why do criminals still claim to be Nigerian princes (as opposed to Ghanian,, Indonesian, etc) when everybody has heard of the Nigerian scam? And why is their spelling so atrocious? The answer to this encapsulates both why Dubner’s book have become such runaway bestsellers, as well as why my fellow 1st years love MGEC.
Email scammers are selecting. The cost of mass emailing is low; the cost of financial transacting is higher. By using a trope commonly known to be fraudulent, swindlers select out all but the most gullible – ergo the most likely to complete the financial transaction, and the least likely to alert the authorities. Dubner explained this at length in his Wednesday talk to a packed Huntsman Hall, using the laws and theories of economics to explain an idiosyncrasy about the world. This is the magic (*cough MGEC *cough) of Freakonomics; taking the knowledge gleaned from an area of study and applying it to a field with which is not typically associated.
At the talk, Dubner called this the colonialism of economists. With this phase he’s not implying that Mike Sinkinson churns butter in his spare time; rather, he maintains that economists colonize other fields of study. Economists borrow from and contribute to behavioral psychology, criminology, sociology, etc. in their study of incentives and human beings. To carry the colonialism analogy, Freakonomics represents the outer territories of the empire. Freakonomics related crack dealers and the grim trigger nash equilibrium, Superfreakonomics compared the relative utility of a pimp dealer to that of a realtor, and Think Like A Freak explains how perverse incentives led physicians to misdiagnose the science behind ulcers for years.
Critics say these works (and the many imitators they spawned) are frivolous at best, misleading at worst. But they miss the point. Often, people think about issues narrowly and provincially. Think Like a Freak attempts to explain how to use thinking on the margins, incentives, and other major lessons of economics to evaluate phenomena. As a former security professional, I often wonder why game theory was not better applied in Iraq to eliminate groups like ISIS, or is not currently applied to the drug war in Mexico to creative a lower-level nash equilibrium for violence. Applying the lessons from one field to another can often yield positive results. If there is a larger lesson from Dubner and his Freakonomists, it is not that, as the critics suggest, there is something off about the colonial nature of economics, it is that other academic professions and methods of analysis should become as imperial.