Why experts of every kind are in the perfect position to exploit you
The title “Why experts of every kind are in the perfect position to exploit you” comes from the index of the book titled Freakonomics. Freakonomics argues that people, even experts, respond to incentives. Experts might have incentives due to which their interests may go against yours.
“Experts depend on the fact that you don’t have the information they do. Or that you are so befuddled by the complexity of their operation that you wouldn’t know what to do with the information if you had it. Or that you are so in awe of their expertise that you wouldn’t dare challenge them.”
Experts can exert a leverage over you: fear. Fear that your children will find you dead on the bathroom floor of a heart attack if you do not have angioplasty surgery, despite research suggesting angioplasty often does little to prevent heart attacks.
The book also gives a concrete example of real estate agents as experts in house-selling and how their incentives drive their decisions against your goal of maximizing the profits from the sale of the house.
The study that the book cites says that a real estate agent waits, on an average, ten extra days before selling their own house, waiting for a better offer, and sells it for over 3 percent more than your house- or $10,000 on the sale of a $300,000 house. This is because the agent only gets $150 out of your $10,000 profit which isn’t worth waiting for the effort and time of real estate agent if they have to wait for 10 days. So people, including experts, respond to incentives.
There are other instances listed in the book on how experts can abuse the information they have. For instance, Enron had hidden partnerships, disguised debt, and the manipulation of energy markets.
Google abusing the ad market, search engine market or mobile operating system market due to its monopoly position is also an instance of this.