Misbehaving - Book Review

Reading The Undoing Project changed my perspective on psychology and got me interested in learning more; but as usual wanting to do something and actually doing something are two different things.

In 2017, I read that Mr.Richard Thaler a behavioral economist and a Distinguished Professor of Economics and Behavioral Science had won the Nobel prize for Economics and his contribution to behavioral sciences. He had worked closely with Daniel Kahneman and Amos Tversky our protagonists from 'The Undoing Project' in defining the field of Behavioral Economics. Behavioral Science had come a long way from when Mr. Thaler had been fighting to get acceptance from "real" economists who did not believe that human behavior had anything to do with economics.

More time passed, then one day channel surfing I hit on an episode of the "The Interview Show" on one of the PBS channels. The host Mark Bazer was interviewing Mr.Thaler and that is when I resolved to buy Misbehaving. Reading this book has piqued my curiosity to know more about this field. Behavioral Psychology has a lot to do with the lives of people and ignoring that leads to not very good outcomes.

Let's accept it, Economics is not a very interesting subject and I for one am not smart to peruse an economics book and come away with a greater knowledge of economics, that is where books like this one are a great thing. Written in an engaging and easy prose that even a non-economist would understand, interspersed with personal anecdotes makes reading that much more easier.

Littered with experiences of real people he explains what a SIF (Supposedly Irrelevant Factor)is but what an outsize importance it has in people making decisions. You will come across a few other interesting acronyms like this important JND (Just-Noticeable Difference).

Let's say you paid for a gym membership but you don't go to the gym often. Do you need worry about it? "Don't cry over spilled milk" in the layman's explanation for sunk costs. What about opportunity cost?

Interspersed with economics knowledge we also learn the career trajectory of Richard Thaler and his fight to gain acceptance from economists who believed human behavior does not alter established economic theories. The one other important thing about Mr.Thaler is that he was a trouble maker, fighting against orthodoxy and questioning the established norms in economics.

Once the field began gaining acceptance, they start using behavioral psychology to improve outcomes across government institutions, business etc.,

You only need to have a partial interest in behavior economics to start reading this book. I assure you it is a good read.

Like what you are reading? Subscribe!