Richard H. Thaler has brought humanity back to economics with his wonderfully entertaining novel, Misbehaving, The Making of Behavioral Economics. In the academia of economics, humans are perceived as rational individuals, making proper decisions founded on logic. Yet, as we all know, human beings are hardly perfect.
We’re prone to mistakes, to misperceptions, to mishaps. Thaler, a distinguished economist himself, has recognized this fallacy and is seeking to change that perception in his field, thus bringing economics back down to Earth. His clear and often comedic prose breathes life into the pages, engaging readers’ interest while teaching them at the same time.
By identifying with human nature through our universal inclination toward mistakes, Thaler touches upon something many educational novels miss, humanity. He realizes that the standards of rationality which have characterized economics through the centuries is not fool-proof, and he is exploring an oft-neglected though necessary facet of market behavior.
Incorporating recent psychological discoveries with a clear comprehension of broad economic behavior, Thaler is able to shed light on how we, as individuals, should behave in the current marketplace. He offers insight into how to make smarter economic decisions despite our natural predisposition for impulsive, irrational, emotional behaviors. However, his advice is not merely limited to personal finance, for it also encompasses general trends in commercial building, in the NFL draft, and even in current ride-sharing behemoth Uber.
What’s more is that this book could, quite frankly, indicate a paradigm shift in economic theory. His findings pose interesting possibilities for the science, potentially bringing it roaring back to life in academic circles. By acknowledging the very real possibility of human foible in economic discretion, Thaler is being a realist. The fact that he is able to introduce such an intriguing and innovative perspective with such a candid tone is merely an added benefit.
While I’m not saying this book is entirely comprehensive, or even entirely accurate, I am saying it poses questions that need to be asked, that need to addressed. All science should reflect contemporary thought, and contemporary evidence. Thaler does just that with a gusto that simply cannot be ignored.
By combining anecdotal evidence with market theory, Richard Thaler remarkably brings economics to life. His engaging prose, direct manner of speaking, and outright hilarious memories offer any reader a memorable and valuable literary experience.