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booksaremyjam's review against another edition
2.0
I have taken psychology classes and classes centering around morality and classes centering on economics. I had hoped this book would assume a base level of knowledge, and dig deep on the concepts. Instead, it was a very broad stroke overview of behavioral economics, that honestly felt more self-reflection than scholarly. Thaler basically wrote a memoir, peppered in some basic studies that most people have already heard about, and was like "yo, my friends and I are smart!"
Here, I'll tell you the "ending" so you don't have to read this book: humans don't act like economic models, because humans aren't machines. They weight and value things differently, which changes how they view gains and losses. Who'da thunk it?!
...
Here, I'll tell you the "ending" so you don't have to read this book: humans don't act like economic models, because humans aren't machines. They weight and value things differently, which changes how they view gains and losses. Who'da thunk it?!
...
amrith10's review against another edition
4.0
Semi-autobigraphical. Semi-behavioural. Wholly enjoyable.
alicehr's review against another edition
4.0
Nice overview of the development of behavioural economics. Not as repetitive as this type of book typically is.
inquiry_from_an_anti_library's review against another edition
informative
reflective
medium-paced
4.0
The purpose of behavior economics is to add other disciplines to the study of economics, principally psychology. Economics carried more weight in influencing policy than other social sciences. Thaler started to notice more and more behaviors that people do which contradict the basic assumptions. Starting a list of observation which seemed to go against what a supposed rational agent would do was the germinal stage of behavioral economics. Behavioral economics would not have been possible if not for the collaboration of psychologists Daniel Kahneman and Amos Tversky who devised Prospect theory which Thaler noticed answered many of the lists’ problems. Prospect theory shows that gains have a smaller absolute impact than the same amount of loss. People feel loss more than gain. It was with conversations and research of Kahneman and Tversky which enabled the development of behavioral economics.
Initial research showed what become known as endowment effect, that people value what they own more highly than things they do not own. Before obtaining something, people value an object less than when they own it while when they have ownership will no longer sell it at the price for which they would not have purchased it. What followed is broadly considered mental accounting. Money is easiest traded asset and can be used for any purpose, but people have different budgets for certain expenses and will not move money to where it is more needed even if another budget is not being used much. Thaler claims that the idea of a sunk cost is important in economics but is not taken up as often as it should. Even though a person cannot regain the cost, the person will try to utilize the product bought even though time could be spent doing more beneficial activities.
Economics uses mostly acquisition utility, generally referred to consumer surplus which is the difference in value between what is bought and given up. Thaler finds that transactional utility is extremely important which is the price difference between what would normally be paid and what was actually paid. Anchoring a price and then the adjusting to it as a sale or an additional cost has vast differences to what is being purchased.
Self-control and other research showed that people did not really do what the rational agent is supposed to do. The economics community did have similar reasons why not to accept the results such ‘as if’ argument that people did not really need to solve related equations to behave appropriately, they just needed to act as if they were choosing based on the complex equations. Another argument was that people would have an incentive to do better with higher monetary or other values. Economists also argued that people will learn over time to make the correct decisions. The final usual argument about the results was that competition would force competitors to maximize their decisions. These four arguments against the results of the anomalies that Thaler found stand as contradictory. As if creates unrealistic assumptions, there is no research on incentives working for only large-scale problems, learning requires repetition which life provides a limited amount of, and business do not maximize.
Thaler shows many discrepancies between what people choose and what is predicted by rational choice model. Rational choice creates a narrow choice of behavior that can be considered rational. When Thaler provides evidence that people can do better, he also creates a narrow choice that would be acceptable. The traditional models lack much variables and Thaler does much to show which variable are missing, but the claims are also limited. At times there seems to be paradoxical reasoning such as in one chapter making a claim that there are not enough trades to adhere with rational choice model, but in another chapter making a claim that there are too many trades to adhere with rational choice model. The biggest problem with the book is what it lacks: negative consequences. Thaler does acknowledge that nudging people can have very bad consequences but is briefly mentioned and not given proper explanation.
Behavior economics is important in the fact that it shows how much economics there is still out there to understand and creating interdisciplinary understandings. It takes more than just economics to know which economic models can stand to application. Applications are not by necessary financial as the latter part of this book explores but also social applications. There is a huge contrast in the difference between what a rational agent perceives as fair and what is considered fair by a community. This book has more than just theories and ideas, it is also part autobiography which consists with research.
Initial research showed what become known as endowment effect, that people value what they own more highly than things they do not own. Before obtaining something, people value an object less than when they own it while when they have ownership will no longer sell it at the price for which they would not have purchased it. What followed is broadly considered mental accounting. Money is easiest traded asset and can be used for any purpose, but people have different budgets for certain expenses and will not move money to where it is more needed even if another budget is not being used much. Thaler claims that the idea of a sunk cost is important in economics but is not taken up as often as it should. Even though a person cannot regain the cost, the person will try to utilize the product bought even though time could be spent doing more beneficial activities.
Economics uses mostly acquisition utility, generally referred to consumer surplus which is the difference in value between what is bought and given up. Thaler finds that transactional utility is extremely important which is the price difference between what would normally be paid and what was actually paid. Anchoring a price and then the adjusting to it as a sale or an additional cost has vast differences to what is being purchased.
Self-control and other research showed that people did not really do what the rational agent is supposed to do. The economics community did have similar reasons why not to accept the results such ‘as if’ argument that people did not really need to solve related equations to behave appropriately, they just needed to act as if they were choosing based on the complex equations. Another argument was that people would have an incentive to do better with higher monetary or other values. Economists also argued that people will learn over time to make the correct decisions. The final usual argument about the results was that competition would force competitors to maximize their decisions. These four arguments against the results of the anomalies that Thaler found stand as contradictory. As if creates unrealistic assumptions, there is no research on incentives working for only large-scale problems, learning requires repetition which life provides a limited amount of, and business do not maximize.
Thaler shows many discrepancies between what people choose and what is predicted by rational choice model. Rational choice creates a narrow choice of behavior that can be considered rational. When Thaler provides evidence that people can do better, he also creates a narrow choice that would be acceptable. The traditional models lack much variables and Thaler does much to show which variable are missing, but the claims are also limited. At times there seems to be paradoxical reasoning such as in one chapter making a claim that there are not enough trades to adhere with rational choice model, but in another chapter making a claim that there are too many trades to adhere with rational choice model. The biggest problem with the book is what it lacks: negative consequences. Thaler does acknowledge that nudging people can have very bad consequences but is briefly mentioned and not given proper explanation.
Behavior economics is important in the fact that it shows how much economics there is still out there to understand and creating interdisciplinary understandings. It takes more than just economics to know which economic models can stand to application. Applications are not by necessary financial as the latter part of this book explores but also social applications. There is a huge contrast in the difference between what a rational agent perceives as fair and what is considered fair by a community. This book has more than just theories and ideas, it is also part autobiography which consists with research.
venkyloquist's review against another edition
3.0
Richard Thaler is popularly acknowledged as the founding father of Behavioral Economics. In this book, he provides an evolutionary history of this Branch of Economics, which although not receiving the same extent of limelight and recognition as has been accorded to mainstream Economics, is definitely here to stay.
In "Misbehaving", Thaler traces the development of Behavioral Economics from a fledgling and hesitant origins to its worldwide acceptance as a formal field of study. This painful, albeit alluring and exciting growth is richly catalogued by Thaler in a language that is simple, and easy to understand. Thaler also takes the reader through interesting concepts such as randomized control trials and laboratory experiments the results of which reveal the extraordinary fact that under most circumstances even the most rational among us behave more like humans rather than cold, calculating rational "Econs".
Thaler also shares his experience of working with the best in the field, such as Daniel Kahneman and the late Amos Tversky. The contributions made by this phenomenal duo to the embellishment and uplift of Behavioral Economics is unparalleled and Thaler provides ample recognition of this fact in his book.
Overall this book makes for key reading in comprehending the essentials of Behavioral Economics as an important facet in solving many of the socio economic problems that ail mankind today.
In "Misbehaving", Thaler traces the development of Behavioral Economics from a fledgling and hesitant origins to its worldwide acceptance as a formal field of study. This painful, albeit alluring and exciting growth is richly catalogued by Thaler in a language that is simple, and easy to understand. Thaler also takes the reader through interesting concepts such as randomized control trials and laboratory experiments the results of which reveal the extraordinary fact that under most circumstances even the most rational among us behave more like humans rather than cold, calculating rational "Econs".
Thaler also shares his experience of working with the best in the field, such as Daniel Kahneman and the late Amos Tversky. The contributions made by this phenomenal duo to the embellishment and uplift of Behavioral Economics is unparalleled and Thaler provides ample recognition of this fact in his book.
Overall this book makes for key reading in comprehending the essentials of Behavioral Economics as an important facet in solving many of the socio economic problems that ail mankind today.
phouweling's review against another edition
5.0
This book is probably the most accessible book on behavioral economics that I’ve read. Thaler narrates the history of the field and interweaves it with many personal anecdotes. The clashes with traditional economists in the early years are especially worthwhile.
Coincidentally, Thaler was awarded the Nobel prize while I was reading this book. Which made it even more fun to read, because it ‘proofs’ he was right all along that economic theories based on ‘Econs’ make no sense.
Coincidentally, Thaler was awarded the Nobel prize while I was reading this book. Which made it even more fun to read, because it ‘proofs’ he was right all along that economic theories based on ‘Econs’ make no sense.
davidr's review against another edition
4.0
This book is by Richard Thaler, one of the founders of the field of behavioral economics. When he first started getting into this field, he faced mountainous obstacles, mostly from his fellow economists. For many years, he collaborated with Daniel Kahneman and Amos Tversky, who are famous for the book [b:Thinking, Fast and Slow|11468377|Thinking, Fast and Slow|Daniel Kahneman|https://images.gr-assets.com/books/1317793965s/11468377.jpg|16402639]. In 2017, Thaler received the Nobel Prize in economics, for his work in understanding the realities of economic decision making.
This book is enjoyable and engaging, and is packed with interesting anecdotes. Perhaps he goes a little overboard, in describing his personal story and his interactions with Kahneman and Tversky; there is a little bit too much of this, and it almost feels like name-dropping. The book is mostly about the development and history of behavioral economics, rather than the subject of behavioral economics itself. On the other hand, I also very much enjoyed reading one of his previous books, [b:Nudge: Improving Decisions About Health, Wealth, and Happiness|3450744|Nudge Improving Decisions About Health, Wealth, and Happiness|Richard H. Thaler|https://images.gr-assets.com/books/1348322381s/3450744.jpg|2535409].
This book is enjoyable and engaging, and is packed with interesting anecdotes. Perhaps he goes a little overboard, in describing his personal story and his interactions with Kahneman and Tversky; there is a little bit too much of this, and it almost feels like name-dropping. The book is mostly about the development and history of behavioral economics, rather than the subject of behavioral economics itself. On the other hand, I also very much enjoyed reading one of his previous books, [b:Nudge: Improving Decisions About Health, Wealth, and Happiness|3450744|Nudge Improving Decisions About Health, Wealth, and Happiness|Richard H. Thaler|https://images.gr-assets.com/books/1348322381s/3450744.jpg|2535409].
baghaii's review against another edition
5.0
This was one of the best books on economics that I have read in a long time. It discusses the creation of evidence-based economics that work in a world of Humans as opposed to a world of Econs, humans that behave optimally ignoring numerous supposedly irrelevant factors.
In this book, Thaler talks about how he started applying knowledge from psychology to economics to have a better understanding of how actual humans behave as opposed to how Econs behave. He said nice things about Cialdini, the author of Influence. Influence is a book on sales and marketing written by Cialdini who is a psychologist. That book has been around a long time and is very popular among people who are in business and need to sell things.
Thaler writes about how people treat money as their own money or as someone else's money. He writes about how business owners may want to take risks. However, the incentives exist for the managers under those owners not to take risks because the managers do not want to be fired for taking risks and losing money.
This book talks about the Chicago School of economics a lot. Some of the key players in this book were people who helped President Obama set his economic agenda. The book was interesting because it mentioned some of the personal characteristics of those people. Maya Shankar was one of the interesting economists mentioned in this book that I, a person who does not follow economics that closely, had never heard of before.
In this book, Thaler talks about how he started applying knowledge from psychology to economics to have a better understanding of how actual humans behave as opposed to how Econs behave. He said nice things about Cialdini, the author of Influence. Influence is a book on sales and marketing written by Cialdini who is a psychologist. That book has been around a long time and is very popular among people who are in business and need to sell things.
Thaler writes about how people treat money as their own money or as someone else's money. He writes about how business owners may want to take risks. However, the incentives exist for the managers under those owners not to take risks because the managers do not want to be fired for taking risks and losing money.
This book talks about the Chicago School of economics a lot. Some of the key players in this book were people who helped President Obama set his economic agenda. The book was interesting because it mentioned some of the personal characteristics of those people. Maya Shankar was one of the interesting economists mentioned in this book that I, a person who does not follow economics that closely, had never heard of before.