Misbehaving: The Making Of Behavioral Economics

Nobel laureate 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 engaging 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 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. Our misbehavior has serious consequences. The study of human miscalculations and their effects on markets now drives efforts to make better decisions in our lives, businesses, and 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. He reveals how behavioral economic analysis opens up new ways to look at household finance, faculty office assignments, TV game shows, the NFL draft, and companies like Uber.

Laced with lively stories of Thaler’s battles with traditional economic thinking, Misbehaving offers a profound and entertaining insight into human foibles, highlighting the intersection of economics and psychology and its implications for individuals, managers, and policymakers.