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Misbehaving
Book

Misbehaving

The Making of Behavioral Economics

Richard H. Thaler
W.W. Norton, 2015

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Editorial Rating

9

Qualities

  • Innovative
  • Applicable

Recommendation

Economics is as mathematical as ever, and it remains rife with unrealistic expectations about human behavior. For theoretical convenience, economists assume that everyone behaves rationally and makes the best possible choices at all times. But, says economist and Nudge co-author Richard H. Thaler, real human beings act in predictably irrational ways. He argues convincingly – and with no shortage of witty anecdotes and all-too-human stories of his own battles with economics orthodoxy – that a dose of behavioral science could produce better economic forecasts, lead to improved public policies and give the dismal science a much-needed human touch. getAbstract recommends this captivating treatise to readers familiar with economics and interested in the evolution of its behavioral aspects.

Take-Aways

  • Economics is the most influential of the social sciences because of its far-reaching theories and their impact on people’s lives – however, its assumptions are faulty.
  • Standard economic models posit that people are always rational and that markets send reliable signals.
  • Instead people “misbehave.” Their routine use of heuristics leads to errors in judgment and to biases that belie rational decision making.

About the Author

Richard H. Thaler, the American Economic Association’s 2015 president, is a professor of behavioral science and economics at the University of Chicago. He co-wrote the bestseller Nudge.

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