They’ve convinced me - as they have millions of others - that far from being a dry study of numbers and spreadsheets, economics can solve the riddles of everyday life and explain how the world works. As they explain:

“Since the science of economics is primarily a set of tools, as opposed to a subject matter, then no subject, however offbeat, need be beyond its reach.”

The concept of Freakonomics has really caught on since the publication of Levitt and Dubner’s 2005 book Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. It has spawned sequels, a feature film and a successful blog and podcast.

Levitt and Dubner changed the way people look at the world by putting the study of incentives under the spotlight. They argue:

“Incentives are the cornerstone of modern life. And understanding them – or, often, ferreting them out – is the key to solving just about any riddle, from violent crime to sports cheating to online dating.”

This might sound obvious on the face of it. Whether it’s the promise of a free gift for filling out a survey or the threat of a fine if I’m late returning my copy of Freakonomics to the library, we’re accustomed to navigating the vast array of incentives used by those wanting to influence our behaviour.

However, dig a little deeper and things start to get really interesting. What if us humans aren’t that easy to manipulate and don’t respond as anticipated? What if some people will always find a loophole to cheat their way around these incentives?

Take, for instance, a case of late pickups from a childcare centre. You might expect that fining parents for being late collecting their children at the end of the day would encourage them to be on time. But you’d be wrong. A study by economists in Israel found that the introduction of a $3 fine actually led to a doubling in the number of parents showing up late.

Levitt and Dubner explain:

“One problem may have been that the amount was not big enough, signalling to the parents that late pick-ups were not a significant problem. The main issue, however, was that this small economic disincentive replaced an existing moral disincentive: the guilt parents felt when arriving late. Parents could now effectively buy off their guilt for a few dollars, so they were less worried about being late. Furthermore, once the signal had been sent, the effect could not be undone. The removal of the fines had no remedial effect on the number of late pick-ups.”

Remember those schoolteachers and sumo wrestlers I mentioned earlier? The thing they have in common, according to our Freakonomists, is cheating. They argue that for every clever person who creates an incentive scheme, there is an army of clever people who will spend even more time trying to beat it.

In the mid-1990s, the Chicago Public School system embraced high stakes testing. Schools with low reading scores were punished by being placed on probation and threatened with closure. This raised the stakes for teachers who may have been passed over for promotions, reassigned or even dismissed if their classes performed poorly in tests. The high stakes testing policy also presented some positive incentives – when it was in operation in California, teachers could earn a $25,000 bonus if their class test scores were particularly high.

The result?

“An analysis of the entire Chicago data revealed evidence of teacher cheating in more than two hundred classrooms per year, roughly 5 percent of the total. This is a conservative estimate, since the algorithm was able to identify only the most egregious form of cheating – changing students’ answers. In a recent study among North Carolina schoolteachers, some 35 percent of the respondents said they’d witnessed their colleagues cheat in some fashion.”

It turns out that one thing that ‘high stakes testing’ incentivised was dishonesty. The analysis, which looked at test scores of every student from third to seventh grade from 1993 to 2000, identified a big spike in teachers cheating when the new incentives were introduced. In California, the $25,000 bonuses were scrapped because of cheating concerns.