Thursday, October 15, 2015

Misbehaving: The Making of Behavioural Economics

Staff review by Chris Saliba

Pioneering behavioural economist Richard Thaler tells the history of a new branch of economic thinking.

Traditional economists like to see the world in their own image. They believe that we all make rational choices when it comes to spending, investing, saving and the myriad of other economic decisions we make. In the early Seventies, a group of renegade economists and psychologists had an inkling that this view wasn't quite correct. They set about proving that humans often didn't act rationally at all when it came to their money. Through laboratory controlled tests and peer reviewed papers, they convincingly put their case.

Richard Thaler, the respected behavioural economist and co-author of the pathbreaking book Nudge: Improving Decisions About Health, Wealth and Happiness, was at the forefront of this movement. He swum against the tide of intellectual orthodoxy and had the courage to face ridicule by challenging it.

Misbehaving: The Making of Behavioural Economics mixes an academic's memoir with the history of behavioural economics, from someone who was there. The book is fascinating for the light it shines on the rigid and arrogant thinking of intellectual elites. Traditional economists were often dismissive of behavioural economists and their research. Informative and entertaining, Misbehaving surprises and amazes with its revelations on how we humans misbehave with money.

Misbehaving: The Making of Behavioural Economics, by Richard Thaler. Published by Allen Lane. ISBN: 9781846144035  RRP: $45

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