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- [Tyler] I love economics.

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I began studying economics[br]when I was 13

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and I haven't stopped yet.

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Economics really has changed[br]my life and the whole way

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I see the world.

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What's so powerful[br]about the discipline

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is just how much it shapes[br]how you understand

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everything around you.

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- [Alex] But perhaps you're asking,[br]what's my incentive

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to learn economics?

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Well, that's a great question.

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You've already hit on[br]a key economic insight, incentives.

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For example, why is the service[br]at a local restaurant

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typically so much better[br]than from the cable company?

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- Or why do laws[br]which supposedly protect

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endangered species,[br]sometimes end up

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with more of those animals[br]being killed?

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- Or why do big toy companies[br]sometimes advocate for regulations

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which raise their costs?

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Incentives are the key.

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- Another example[br]might help us explain.

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Way back in 1787,[br]the British government

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hired sea captains to ship[br]convicted felons to Australia.

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Conditions on those ships[br]were just awful.

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On one voyage, more than one-third[br]of the men died

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and the rest arrived beaten,[br]starved and sick.

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The public was outraged,[br]newspapers called

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for better conditions,[br]the clergy appealed

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to the captains' sense of humanity,[br]and British Parliament

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passed regulations[br]requiring better treatment

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of these prisoners.

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Unfortunately, those attempted[br]solutions simply didn't work.

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The death rate[br]remained shockingly high.

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- So Tyler, as a good economist,[br]how would you solve this problem?

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- Well, there was one economist[br]at the time who came up

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with a novel solution.

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It was implemented[br]and it basically worked.

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Instead of paying the captains[br]for each prisoner

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who embarked to Australia,[br]the government

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would pay the captains[br]only for the prisoners

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who arrived alive.

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Overnight, the incentives[br]of the sea captains changed.

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The survival rate of the prisoners[br]shot up to 99%.

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As one observer put it,[br]economy beat sentiment

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and benevolence.

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- So what's your incentive[br]to learn economics?

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People hear that I'm an economist[br]and they ask me

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about managing their money.

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And economics does have[br]some lessons for investing

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in the stock market, but economics[br]is much broader than that.

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It's the study of human action,[br]how people make choices,

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and how they should make[br]choices under scarcity.

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Economics will help you[br]with your choices,

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whether picking a career,[br]parenting a child,

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or deciding how much education[br]is a truly worthwhile investment.

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Overall, economics will give you[br]a deeper understanding

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of the key issues of our time.

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- Economics can be hard.

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Retraining your brain[br]to look at the world

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in a different way,[br]isn't always easy.

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- But the reward[br]is a new set of eyes

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to see the world.

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So are you ready to begin?

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