Misbehaving

Economics was once a discipline that studied mechanical, predictable humans. But not anymore. Nobel Prize-winning economist Richard H. Thaler has spent his career studying the radical notion that the central agents in the economy are humans—predictable, error-prone individuals. His research reveals a different world: one in which we use mental accounting to allocate money differently depending on where that money came from, gamble with our retirement funds, and save and consume too much unhealthy food. Misbehaving is his arresting, frequently hilarious account of the struggle to bring an academic discipline back down to earth—and change the way we think about economics, ourselves, and our world. Traditional economics assumes rational actors. Early in his research, Thaler realized these Spock-like automatons were nothing like real people. Whether buying a clock radio or selling basketball tickets or applying for a mortgage, we all succumb to biases and make decisions that deviate from the standards of rationality assumed by economists. In other words, we misbehave. More importantly, our misbehavior has serious consequences for individuals and society at large.