Misbehaving: The Making of Behavioral Economics
by Richard H. Thaler, 2015
Richard Thaler has had a front-row ticket to the shaping of the behavioral economics field. In fact, he’s probably driving the bus. Initially working with psychologists Daniel Kahneman and Amos Tversky, Thaler helped define where the traditional model of economic thinking falls short. Humans aren’t Econs (economically rational utility-maximizers). Thaler’s initial work helped document many Supposedly Irrelevant Factors (according to economic theory) that significantly affect human decision-making. He was an outsider arguing for inclusion of behavioral factors at more traditional economic gatherings. Once the new field showed enough promise and more behavioral economists started doing research, the field took on a life of its own. Now, behavioral economics conferences are common, and I’m even presenting at a Behavioral Operations Conference in July. Thaler even became president of the American Economics Association in 2015 (a development which he describes as “the lunatics are running the asylum” in the book), and behavioral economic thinking has made its way into the U.S. and U.K. executive government policy groups.
Overall, funny and insightful. Worthwhile read.