What Do Schoolteachers and Sumo Wrestlers Have in Common?

This chapter defines economics as a study of incentives and how they are pursued.
Incentives are the basis of all human action and interaction [i.e. - people do not act randomly, they are always following some set of self-imposed rules and/or are trying to gain something for themselves].
There are three types of incentives:
-Moral (internalized self-judgments)
-Social (what other people think of you resulting from your actions or choices)
-Economic (material property)
Effective (dis)incentive schemes like antismoking campaigns usually feature all three.
Extremely weak or strong (dis)incentives will not achieve the desired changes in the target population. Either nothing will happen, the opposite of the desired result will occur, or the desired outcome will occur, but with ill-will from the subjects. The trick is to find balance—using all three types of (dis)incentives in a well structured and proportionate manner.
“Cheating” means getting more benefit for less input/effort than is proscribed. Some people will always try to cheat the incentive schemes.....

How do we profit by what we do and what incentives are so attractive that they compel us to act unethically?
The author describes the research he used to identify a number of Chicago public school teachers who helped their students cheat on standardized tests. He analyzed standardized test answer patterns and identified suspicious groups of correct answers. A retest was administered to identify cheating teachers and the findings resulted in the termination of the clear offenders / cheaters, as well as systematic reforms in the school standardized testing practices.

Another research project involved the analysis of the scores and contest records of Japan’s top level sumo wrestlers. No definitive proof had ever been shown that cheating had been taken place in this sport, though there had always been suspicion. By comparing the performances of the wrestlers in matches with different stakes and potential consequences, the author found that cheating does often take place in the sport.

The story of an entrepreneur who sold bagels using the honor system to office workers in Washington, D.C. wraps up this chapter. The entrepreneur kept details financial records and found consistent patterns in the behavior of those who stole bagels. The author clearly illustrates that cheating can be predicted