Shortlisted for the Financial Times & McKinsey Business Book of the Year Award.
Get ready to change the way you think about economics.
Richard H. Thaler has spent his career studying the radical notion that the central agents in the economy are humanspredictable, error-prone individuals. Misbehaving is his arresting, frequently hilarious account of the struggle to bring an academic discipline back down to earthand 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:||Norton, W. W. & Company, Inc.|
|Product dimensions:||5.40(w) x 8.30(h) x 1.20(d)|
About the Author
Richard H. Thaler is the coauthor of the best-selling book Nudge with Cass R. Sunstein, and the author of Quasi Rational Economics and The Winner’s Curse. He is a professor of behavioral science and economics at the University of Chicago Booth School of Business and, in 2015, the president of the American Economic Association.
Table of Contents
I Beginnings: 1970-78 1
1 Supposedly Irrelevant Factors 3
2 The Endowment Effect 12
3 The List 20
4 Value Theory 25
5 California Dreamin' 35
6 The Gauntlet 43
II Mental Accounting: 1979-85 55
7 Bargains and Rip-Offs 57
8 Sunk Costs 64
9 Buckets and Budgets 74
10 At the Poker Table 80
III Self-Control: 1975-88 85
11 Willpower? No Problem 87
12 The Planner and the Doer 99
13 Misbehaving in the Real World 115
IV Working with Danny: 1984-85 125
14 What Seems Fair? 127
15 Fairness Games 140
16 Mugs 148
V Engaging with the Economics Profession: 1986-94 157
17 The Debate Begins 159
18 Anomalies 169
19 Forming a Team 176
20 Narrow Framing on the Upper East Side 185
VI Finance: 1983-2003 203
21 The Beauty Contest 205
22 Does the Stock Market Overreact? 216
23 The Reaction to Overreaction 225
24 The Price Is Not Right 230
25 The Battle of Closed-End Funds 237
26 Fruit Flies, Icebergs, and Negative Stock Prices 244
VII Welcome to Chicago: 1995-Present 255
27 Law Schooling 257
28 The Offices 270
29 Football 277
30 Game Shows 295
VIII Helping Out: 2004-Present 307
31 Save More Tomorrow 309
32 Going Public 323
33 Nudging in the U.K. 330
Conclusion: What Is Next? 347
List of Figures 393