The Making of Behavioral Economics

Book - 2015
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Richard H. Thaler has spent his career studying the radical notion that the central agents in the economy are humans--predictable, error-prone individuals. Misbehaving is his arresting, frequently hilarious account of the struggle to bring an academic discipline back down to earth--and change the way we think about economics, ourselves, and our world.

Traditional economics assumes rational actors. Early in his research, Thaler realized these Spock-like automatons were nothing like real people. Whether buying a clock radio, selling basketball tickets, or applying for a mortgage, we all succumb to biases and make decisions that deviate from the standards of rationality assumed by economists. In other words, we misbehave. More importantly, our misbehavior has serious consequences. Dismissed at first by economists as an amusing sideshow, the study of human miscalculations and their effects on markets now drives efforts to make better decisions in our lives, our businesses, and our governments.

Coupling recent discoveries in human psychology with a practical understanding of incentives and market behavior, Thaler enlightens readers about how to make smarter decisions in an increasingly mystifying world. He reveals how behavioral economic analysis opens up new ways to look at everything from household finance to assigning faculty offices in a new building, to TV game shows, the NFL draft, and businesses like Uber.

Laced with antic stories of Thaler's spirited battles with the bastions of traditional economic thinking, Misbehaving is a singular look into profound human foibles. When economics meets psychology, the implications for individuals, managers, and policy makers are both profound and entertaining.

Publisher: New York :, W.W. Norton & Company,, [2015]
Edition: First edition
ISBN: 9780393080940
Characteristics: xvi, 415 pages :,illustrations
Alternative Title: Making of behavioral economics


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Feb 05, 2017

This book explained 2 subjects to me - economics (not my favorite) and behavior (I am fascinated by it). I found it understandable and accessible. Lots of anecdotes and stories that helped put the "dry" spots (theory) into perspective. It's not something I would have reached for normally - I was drawn to the book while browsing in the airport book shop while waiting for a 5 hour flight to California this summer. I bought it thinking it would be a good airplane read. I couldn't put it down! I found it to be a very good overview of the subject which I had heard of but knew very little about. If you're interested in learning some ideas/theories about why people make the decisions they do - this is a good read. Covers the subject - behavioral economics - well and provides a good history of this "science" that impacts us all.

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