Misbehaving: The Making of Behavioral Economics
Behavioral economics is a super exciting branch of economics which integrates the consumer psychology (like marketing) to explain and find some real interesting insights and explanations to irrational behavior.
Richard H. Thaler, a Nobel Laurette, as well as co-author of widely acclaimed book Nudge, investigates some fascinating phenomenon (or anomalies as he calls them). The book tracks the origins of the behavioral economics. He explains his work-life in parallel and connects the dots.
The “World of Econs” put all their might to suppress this new branch. The book sketches the journey and history of how behavioral aspect was rejected, vehemently debated, and finally accepted by Econs.
He also questions and explains why the finance markets are not efficient – the theories of CAPM and Efficient market theory are hugely questioned – which should serve a lesson to MBA students who built their career on these two theories.
Thaler has worked with Daniel Daniel Kahneman and Amos Tversky – authors of hugely popular and best-seller book – Thinking, fast and slow.
A purely economic man is indeed close to being a social moron.
This book is an eye opener and amazing read with interesting anecdotes. The language is lucid with vivid examples, ranging from game shows, gambling, fairness, beauty contest, and even allocation of faculty blocks! The book talks about – prospect theory, house money, sunk costs, and SIFs (supposedly irrelevant factors).
Go, buy, and immerse in the wisdom of consumer behavior.
If you are looking to learn about digital product management, check Hooked by Nir Eyal about habit formation concepts. Another excellent read.
You can buy the book here.