Misbehaving: The Making of Behavioural Economics by Richard Thaler

Misbehaving by Richard Thaler - book coverMisbehaving: The Making of Behavioural Economics is part autobiography, part history of an idea and part popular economics guide as Richard Thaler recounts his career and key part in the making of behavioural economics.

He gives plenty of credit and pays a fair amount of attention to others along the way. So although the book is very much about him it also serves as a wider guide, introduction to and explanation of, behavioural economics and the understanding of the predictable biases, miscalculations and quirks in human decision making that makes us very different from the idealised perfect rational decision makers economists used to rely on for their theories.

It is a fascinating and very readable account of how economists have started to understand the way humans really behave and why, and in so doing have carved out a new discipline which provides insights that psychology and sociology had previously not managed.

Although Thaler doesn’t pull his punches when it comes to those he disagrees with, he also hints at another, almost as interesting, story – namely why some ideas cling on for so long in the face of newer and better explanations of the world.

Many of the ideas presented are not directly relevant to ordinary day-to-day life but a fair few are – such as the perils of paying attention to sunk costs or to undervaluing what happens in the future – making the book also a useful guide to how to better organise and run your own life.

The audio book version, by the way, is excellent. Great narration and properly adapted for the format, with the book’s diagrams reproduced in an accompanying pdf and the audio script tweaked to make the appropriate versions to them.

If you like this, you might also be interested in Nudge.

Buy Misbehaving: The Making of Behavioural Economics by Richard Thaler here.


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