Misbehaving: The Making of Behavioral Economics

Get ready to change the way you think about economicsRichard H Thaler has spent his career studying the radical notion that the central agents in the economy are humansxpredictable error-prone individuals Misbehaving is his arresting frequently hilarious account of the struggle to bring an academic discipline back down to earthxand change the way we think about economics ourselves and our worldTraditional 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 governmentsCoupling 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 UberLaced with antic stories of Thalerxs 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.