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lynch626's review against another edition
4.0
This is a great book in which Thaler recounts the journey of his life work to discover and make popular the discipline of behavioral economics. I have studied many of the concepts before, but I do like hearing them again with research examples, and Thaler does a great job of relating to the average person. A few concepts and ideas that stood out to me:
-Value of a life: humans place a much higher value on life when people are called out individually (Jane Doe died in a tragic traffic accident last week) rather than with statistics (10,000 people in the state of NC die in traffic-related accidents each year)
-the Endowment effect: leads individuals to systematically value things they already own much more than the identical item in someone else’s hands
-Hindsight bias: past events seem to be more prominent than they appeared while they were occurring. Can lead individuals to believe an event was more predictable than it actually was, resulting in an oversimplification in cause and effect.
-overvaluing early NFL draft picks - Thaler works with several NFL teams to try to show them how they are giving up too much to get earlier picks in the NFL draft.
-company equity evaluation - the stock of one unit/division of a company should never be valued at more than the entire company combined.
One concept that I struggled with was Thaler's attempt to explain how people are more willing to gamble when it comes to losses than gains. (ie-risk/loss aversion & expected returns) He presents the following scenario in various ways throughout the book,
• Scenario 1. Give someone $400. Then offer them a choice of gaining $100, no risk, or a 50/50 chance of gaining $90/$110. People nearly always take the $100.
• Scenario 2. Give someone $600. Then tell them they have a choice between losing $100 or a 50/50 chance of losing $90/$110. People nearly always take the risk.
and argues that since the odds are exactly the same, people's reaction to the 2 scenarios SHOULD be the same. I disagree though- I think it's completely rational to want to gamble instead of taking a sure loss... after a while, I came to the realization that this is exactly what Thaler was attempting to prove though. Not all money is treated equally. I still don't quite understand that Econs think it so weird though. Money is just a placeholder for opportunity, and definitely we do not value all opportunity the same.
Anyway, this book definitely kept me thinking and I like that. Thaler also notes that a great place to go for new articles on behavioral economics is the Journal of Economic Perspectives. I will have to start skimming this periodically. https://www.aeaweb.org/jep/
Link to accompanying PDF: http://download.audible.com/product_related_docs/BK_ADBL_022796.pdf
-Value of a life: humans place a much higher value on life when people are called out individually (Jane Doe died in a tragic traffic accident last week) rather than with statistics (10,000 people in the state of NC die in traffic-related accidents each year)
-the Endowment effect: leads individuals to systematically value things they already own much more than the identical item in someone else’s hands
-Hindsight bias: past events seem to be more prominent than they appeared while they were occurring. Can lead individuals to believe an event was more predictable than it actually was, resulting in an oversimplification in cause and effect.
-overvaluing early NFL draft picks - Thaler works with several NFL teams to try to show them how they are giving up too much to get earlier picks in the NFL draft.
-company equity evaluation - the stock of one unit/division of a company should never be valued at more than the entire company combined.
One concept that I struggled with was Thaler's attempt to explain how people are more willing to gamble when it comes to losses than gains. (ie-risk/loss aversion & expected returns) He presents the following scenario in various ways throughout the book,
• Scenario 1. Give someone $400. Then offer them a choice of gaining $100, no risk, or a 50/50 chance of gaining $90/$110. People nearly always take the $100.
• Scenario 2. Give someone $600. Then tell them they have a choice between losing $100 or a 50/50 chance of losing $90/$110. People nearly always take the risk.
and argues that since the odds are exactly the same, people's reaction to the 2 scenarios SHOULD be the same. I disagree though- I think it's completely rational to want to gamble instead of taking a sure loss... after a while, I came to the realization that this is exactly what Thaler was attempting to prove though. Not all money is treated equally. I still don't quite understand that Econs think it so weird though. Money is just a placeholder for opportunity, and definitely we do not value all opportunity the same.
Anyway, this book definitely kept me thinking and I like that. Thaler also notes that a great place to go for new articles on behavioral economics is the Journal of Economic Perspectives. I will have to start skimming this periodically. https://www.aeaweb.org/jep/
Link to accompanying PDF: http://download.audible.com/product_related_docs/BK_ADBL_022796.pdf
xin_penguin's review against another edition
5.0
This book is so much fun. Think of this book as leisure reading while gaining some knowledge of behavioral economics.
eswan18's review against another edition
4.0
A pleasant, engaging read. For someone already familiar with the field of economics and especially behavioral econ, the stories included are interesting backstory for findings you may have already heard of.
Thaler is self-deprecating and never too serious, and even throws the occasional barb at a colleague. This book is just him telling you stories from his own perspective, not a rigorous accounting of how the field of economics has changed. From a technical perspective, the book assumes almost no knowledge from the reader, which does result in a fairly shallow discussion of some of the economic concepts included.
Thaler is self-deprecating and never too serious, and even throws the occasional barb at a colleague. This book is just him telling you stories from his own perspective, not a rigorous accounting of how the field of economics has changed. From a technical perspective, the book assumes almost no knowledge from the reader, which does result in a fairly shallow discussion of some of the economic concepts included.
gls_merch's review against another edition
4.0
Auto-biographical narrative on the development of behavioral economics from an early pioneer in the field. Provides a look at some of the early history behind the people and research, which have made the field explode. The book ends with a review of some public and private attempts to apply behaviorial science to nudge people towards more economically rationale decision-making. It's a good jumping off point for someone looking to learn more about the topic of behavioral economics.
gls_merch's review against another edition
4.0
Auto-biographical narrative on the development of behavioral economics from an early pioneer in the field. Provides a look at some of the early history behind the people and research, which have made the field explode. The book ends with a review of some public and private attempts to apply behaviorial science to nudge people towards more economically rationale decision-making. It's a good jumping off point for someone looking to learn more about the topic of behavioral economics.
cstodd08's review against another edition
5.0
A great read, but also makes me angry all over again that I didn't discover behavioral economics until after I grew frustrated with economics and settled for a minor as an undergrad just to be done with it.
Afterthought:
I also enjoyed his musings on the difference between economic and legal academic journal publishing.
Afterthought:
I also enjoyed his musings on the difference between economic and legal academic journal publishing.
jnlybbert's review against another edition
4.0
This was a great behind the scenes on the development of the field of behavioral economics.
microglyphics's review against another edition
4.0
Definitely a post script to [b:Thinking, Fast and Slow|11468377|Thinking, Fast and Slow|Daniel Kahneman|https://d.gr-assets.com/books/1317793965s/11468377.jpg|16402639], but quite worthwhile. I was expecting a lot of redundancy, but, though there was some, it stood on its own.