When to Rob a Bank

Imagine you're standing at a street corner in Manhattan, watching the morning rush hour unfold. Thousands of people stream past, each making countless small decisions that ripple through the economy in ways they never consider. A businessman chooses to skip his usual coffee shop because the line is too long, inadvertently affecting the barista's tips for the day. A parent decides to walk their child to school instead of driving, slightly reducing traffic congestion for everyone else. These seemingly insignificant moments reveal something profound about how our world actually works.

For over a decade, two curious economists have been documenting these hidden patterns of human behavior through their popular blog, collecting observations that challenge our most basic assumptions about incentives, decision-making, and unintended consequences. Their posts have ranged from the economics of prostitution to the optimal time for bank robberies, from why drug dealers still live with their mothers to how baby names predict future success. What emerges from this collection is not just entertainment, but a revolutionary way of seeing the world through the lens of economic thinking. This book invites you to join them on a journey through the fascinating, often surprising intersection of economics and everyday life, where conventional wisdom goes to die and fresh insights are born.

Consider the case of a terrorism expert who posted what seemed like an unthinkable question on a major newspaper's website: "If you were a terrorist, how would you attack?" The post immediately sparked outrage, with readers calling the author everything from a traitor to an idiot. Yet this seemingly reckless inquiry revealed something crucial about how we think about security and risk. The expert wasn't encouraging violence, but rather demonstrating that the most effective way to prevent terrorism might be to think like terrorists themselves.

The author explained that if we assume terrorists spend their time brainstorming attack strategies, then the public should be doing the same thing. The fact that six years had passed since the last major terrorist attack in America suggested either that terrorists were remarkably incompetent, or that their actual goals differed from what most people assumed. This uncomfortable logic led to an even more uncomfortable conclusion: if terrorists truly wanted to create widespread fear and economic disruption, they could do so with surprisingly simple, low-tech methods that would be nearly impossible to prevent.

The controversy surrounding this post illuminated our collective discomfort with uncomfortable truths. We prefer to believe that dangerous thoughts should remain unspoken, that acknowledging vulnerability somehow increases it. But this backwards reasoning prevents us from addressing real problems effectively. The most dangerous questions are often the ones we're most afraid to ask, and the most valuable insights come from following logic wherever it leads, even when it challenges our moral intuitions.

This willingness to ask provocative questions extends far beyond terrorism into every corner of human behavior. Whether examining why public libraries might struggle to exist if invented today, or why airline safety theater persists despite its obvious ineffectiveness, the key insight remains the same: the questions that make us most uncomfortable are often the ones most worth exploring. Sometimes the path to better solutions requires first admitting how broken our current systems really are.

A few years ago, a Chicago economics professor decided to test a simple hypothesis about addiction by asking colleagues what they considered the most addictive substance on earth. The answers ranged from crack cocaine to caffeine, but Nobel Prize winner Gary Becker offered a surprising response: people themselves. At first, this seemed absurd, but deeper reflection revealed its profound truth. Consider the pattern of falling in love, which follows every classical definition of addiction: initial euphoria, increasing tolerance requiring more and more contact, withdrawal symptoms when separated, and the willingness to sacrifice everything else for the next fix.

This insight about human relationships as the ultimate addiction helps explain countless other puzzling behaviors. Why do employees at restaurants push certain dishes so aggressively? Often because management has created contests where the server who sells the most of a particular item wins prizes. The artificial enthusiasm isn't about the food's quality, but about incentive structures that align employee behavior with business goals. When a waitress insists the salmon is particularly delicious tonight, she might genuinely believe it, or she might be competing for a hundred-dollar prize or even just a free dessert.

These incentive systems work because they tap into fundamental human psychology. A restaurant discovered that offering the new dessert as a prize motivated staff more effectively than offering the traditional cash bonus. Non-monetary incentives often prove more powerful than financial ones because they satisfy deeper psychological needs for recognition, competition, and belonging. Understanding these motivations allows us to design better systems that channel human nature toward productive ends rather than fighting against it.

The lesson extends well beyond restaurant management into every area where humans interact with systems. From voting mechanisms that account for both preference intensity and democratic participation, to payment structures that reward politicians for long-term results rather than short-term popularity, the key insight remains consistent: effective solutions must work with human nature as it actually exists, not as we wish it were.

When economists see rising shrimp consumption, they immediately think about supply chains and production efficiency, while psychologists focus on changing consumer preferences and marketing campaigns. This difference in perspective reveals something fundamental about how we understand the world around us. A fascinating experiment asked blog readers to explain why Americans tripled their shrimp consumption between 1980 and 2005, and the responses fell into predictable patterns based on the respondents' educational backgrounds.

Non-economists overwhelmingly pointed to demand-side explanations: people became more health-conscious, Red Lobster improved their advertising, the movie Forrest Gump made shrimp more popular. But economists consistently identified supply-side factors: better fishing technology, improved preservation methods, revolutionary changes in shrimp farming. The data strongly supported the economists' intuition, showing that shrimp prices fell by roughly 50 percent during this period while quantities soared, indicating that producers had found dramatically more efficient ways to raise and distribute shrimp.

This pattern repeats across countless everyday phenomena that most people misunderstand. When gas prices spike, politicians blame greedy oil companies, but economists recognize the complex interplay of global supply, refinery capacity, and speculative markets. When housing prices crash, homeowners feel violated and angry, but they rarely experience the same emotional distress they would feel losing the same dollar amount from their wallet, because mental accounting makes some losses feel more real than others.

These examples illustrate a broader principle about how economic thinking differs from everyday intuition. We naturally focus on the visible and immediate, while economic forces often work through invisible mechanisms operating over longer time horizons. Learning to see these hidden patterns doesn't just satisfy intellectual curiosity, it provides practical tools for navigating an increasingly complex world where the obvious explanation is often the wrong one.

A determined amateur collector in Texas spent years clipping newspaper articles about criminal arrests, but her collection had an unusual pattern: every single perpetrator had Wayne as their middle name. From homicides to theft to assault, the rogues' gallery included Eric Wayne, Nathan Wayne, Ronald Wayne, David Wayne, and dozens more. While this collection might seem like an amusing coincidence, it hints at deeper questions about how names, identity, and life outcomes intersect in unexpected ways.

Statistical analysis of large datasets reveals that certain names do correlate with different life paths, though the mechanisms remain hotly debated among researchers. Parents who choose unusual names might have different values and expectations that influence child development. Teachers might unconsciously treat students differently based on name associations. Or children themselves might internalize societal reactions to their names and adjust their behavior accordingly. The Wayne phenomenon, while extreme, represents a broader pattern where seemingly arbitrary personal characteristics can have surprisingly predictable consequences.

This principle extends throughout the criminal justice system in ways that challenge conventional wisdom. Consider the curious case of bank robbery, which statistics show to be one of the least profitable crimes imaginable. American bank robbers average about $4,100 when successful, but face a 35 percent arrest rate, meaning the expected value of robbing a bank is actually negative. Yet people continue attempting these crimes, suggesting that either criminals are remarkably bad at calculating risk and reward, or they're motivated by factors that transcend simple economic logic.

The pattern becomes even clearer when examining which anti-crime policies actually work versus those that merely make politicians appear tough on crime. Harsh penalties for drug possession create massive incarceration costs without significantly reducing drug use, while programs targeting the small number of repeat violent offenders show much better cost-benefit ratios. The most effective crime prevention often comes not from changing penalties, but from changing incentive structures in ways that make criminal behavior less attractive relative to legitimate alternatives.

At a fancy Manhattan restaurant, a diner received a plate of chicken so rancid he had to spit it out immediately. The manager eventually confirmed that the chicken was indeed spoiled and needed to be thrown away, then offered a free dessert as compensation for the terrible experience. When the customer asked if that was truly the best they could do, the manager calculated the odds that this polite, well-dressed customer would actually cause a scene and decided the risk was minimal. She was right about his personality, but wrong about the consequences of her decision to offer inadequate compensation.

This incident encapsulates a fundamental economic principle: every human interaction involves implicit calculations about costs, benefits, and likely outcomes. The manager performed a cost-benefit analysis in real time, weighing the expense of comping the entire meal against the probability that the customer would damage the restaurant's reputation. Her error wasn't in the framework of thinking economically, but in underestimating how modern communication channels could amplify one customer's negative experience far beyond the traditional word-of-mouth network.

The same analytical framework applies whether we're examining why airlines routinely oversell flights, why penny slots dominate casino floors, or why weather patterns affect suicide rates. In each case, what appears to be random human behavior actually follows predictable patterns when we understand the underlying incentive structures. The challenge lies not in the complexity of the mathematics involved, but in training ourselves to look past surface explanations and identify the deeper forces at work.

Perhaps most importantly, this perspective reveals that most social problems have solutions, but those solutions often require changing systems rather than simply exhorting people to behave differently. When teachers cheat on standardized tests, the problem isn't moral failure among educators, but poorly designed accountability systems that create perverse incentives. When patients can't afford prescription medications, the solution isn't lectures about personal responsibility, but recognition that pharmaceutical pricing reflects market structures that prioritize profits over access.

The most profound insights often emerge from the questions we're initially reluctant to ask. When we examine terrorism through the lens of cost-effectiveness, or consider bank robbery as a career choice, or analyze love as an addiction, we discover that human behavior follows patterns more predictable than we imagine. The key lies not in judging these patterns as good or bad, but in understanding them well enough to design better systems that channel human nature toward beneficial outcomes.

Three crucial principles emerge from this unconventional approach to understanding the world. First, incentives matter more than intentions, meaning we should focus on what systems reward rather than what they claim to promote. Second, unintended consequences often outweigh intended ones, requiring us to think several steps ahead when designing policies or making major decisions. Third, conventional wisdom frequently gets causation backwards, mistaking symptoms for causes and effects for explanations. By learning to think like economists while retaining our humanity, we can build solutions that actually work rather than simply making ourselves feel better about trying.