Misbehaving: The Making of Behavioral Economics

3.5 biography, only read up to p185

Good prelude on how the field have been initiated and some fun back stories for books that I've read (mainly Nudge and Thinking Fast and Slow)

Richard H. Thaler is a professor of behavioral science and economics at the University of Chicago. He also co-wrote the bestseller Nudge.Economics is the most influential of the social sciences. It has far-reaching theories which impact on people's lives. Yet, economics is full of unrealistic expectations about humans behave. It assumes that everyone behaves rationally and that markets send reliable signals. It is assumed that people make the best possible choices all the time. But, says Thaler, real human beings act in predictably irrational ways; people “misbehave.” They routinely use heuristics which lead to errors in judgment. And they incorporate biases that prevent rational decision making. He illustrates his argument with anecdotes and stories of his own battles with economics orthodoxy. It becomes clear that behavioural science could “nudge” people to make better choices. For example:+ People value what they own more than what they could acquire. Investors dislike losses about twice as much as they like gains. Most people can't ignore sunk costs, though that's the most rational response.+ Investors who check their portfolios more frequently tend to invest more cautiously.An interesting read, but I recommend a much better book on the same topic: [b:Inside the Nudge Unit: How Small Changes Can Make a Big Difference 26171720 Inside the Nudge Unit How Small Changes Can Make a Big Difference David Halpern https://images.gr-assets.com/books/1441303724s/26171720.jpg 46134517].