[PDF/EBOOK] Misbehaving The Making of Behavioral Economics ☆ Richard H. Thaler

review Misbehaving The Making of Behavioral Economics

review Ð eBook, ePUB or Kindle PDF Ö Richard H. Thaler Misbehaving The Making of Behavioral Economics Summary Ý 8 Nobel laureate Richard H Thaler has spent his career studying the radical notion that the central agents in the economy are humans predictable error prone individuals Misbehaving is his arresting freuently 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 worldTraditional economics assumes rational actors Early in his research Thaler realized these Spock like automatons were nothing like real people Whether buying a clock radio selling basketball tickets or applying. Thaler was one of the people who brought behavioural economics into being and this book covers the story of his journey He says that classic economics describes man as a logical creature and bases its theories upon this idealised figure In behavioural economics on the other hand humans do a lot of misbehavingHerewith some odd nuggets and asides I picked from the book view spoiler Economics is considered the most intellectually powerful of the social sciences this is because it has a unified core theory from which nearly everything else follows In fact economists often compare their field to physicsLosses of what we already have hurt us substantially than new gains satisfy us It gives us some pleasure to gain something but it distresses us far to lose somethingChanges are the way that human beings experience life eg if you move from your office to a meeting room and the temperature is the same you won t give the issue of temperature a second thought You will only notice if the meeting room is unusually hot or cold in relation to the rest of the building When we have adapted to our environment we tend to ignore it Instead we notice changes They can be changes from the status uo or changes from what was expectedbut whatever form they take it s changes that make us happy or miserable We learn via freuent practice and immediate feedback We are therefore much likely to learn in relation to the trivia in our lives eg what sort of type of bread we like than in relation to the really big stuff eg what sort of house to buy or wife to choose Learning takes practice and often we don t get practice with the big stuffHuman beings love a bargain Shops that have tried to do away with coupons or round up prices to a realistic figure eg 400 rather than 399 or do away with fake special offers have often had to change back to these practices The customers want the bargains or at least an impression of bargains or sales plummetThe one alternative to the above are retailers like Walmart and Costco where the retailers successfully operate under an everyday low pricing strategy They have convinced customers that their entire shopping experience is an orgy of bargain huntingSunk costsThis is when an amount of money has been spent and the money cannot be retrieved eg Joyce bought three dresses for her six year old daughter Cindy to wear to school but Cindy decided she wouldn t go to school if forced to wear dresses In this instance Joyce has to let go of the money she spent on the dresses but she finds it very difficult to do this We all do Phrases like Don t cry over spilt milk or Cut your losses and move on are another way of taking advice to ignore sunk costs Many believe that the US continued its futile war in Vietnam because they had invested too much to uit Lotteries are a very good way of getting people to take part in something eg if you want people to take part in a survey offer the prize of a nice bottle of wine or whateverPeople hate it when a company appears to be acting greedily eg Uber practices surge pricing whereby prices fluctuate depending upon levels of demand Sometimes there is a big difference between low and peak demand as much as ten times the regular price There have been a lot of complaints from clients about this practice Experimental games have also shown that people put much money into a game if they are able to punish freeloaders We are uite obsessed with fairness in all aspects of lifeWe like keeping the status uo We often find change difficult CollaborationAlthough there are a handful of psychologists who have formed successful collaborations with economists over the years behavioural economics has turned out to be primarily a field in which economists read the work of psychologists and then go about the business doing research independently In neuroscience there is slightly collaboration Not all interdisciplinary meetings are a waste of time but in the author s experience they have been disappointingManagers are often risk averse This is because in most companies creating a large gain for the company will lead to modest rewardswhile creating an eual sized loss will get you fired Companies need to create environments that are benign so that managers will feel comfortable taking risks hide spoiler

review Ð eBook, ePUB or Kindle PDF Ö Richard H. Thaler

Misbehaving The Making of Behavioral Economics

review Ð eBook, ePUB or Kindle PDF Ö Richard H. Thaler Misbehaving The Making of Behavioral Economics Summary Ý 8 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 conseuences Dismissed at first by economists as an amusing sideshow the study of human miscalculations and their effects on markets now drives efforts to make better decisions in our lives our businesses and our governmentsCoupling recent discoveries in human psychology with a practical understanding of incentives and market behavior Thaler enlightens readers about. First book I ve returned to Audible and Audible makes that astonishingly easy not that I expect to need to do it often but my gosh just a click and they send me back my money impressive As my three star rating indicates this is not a Bad book at all I listened to it for a little less than three hours I think and the bits about behavioral economics were really fun I enjoyed Thaler s stories about the irrational financial choices people make which he presents in contrast with the ideal logical choices which traditional economists assume people will act on Unfortunately the book is not about behavioral economics but rather as the title clearly indicates about the Making of the field The author was evidently a central figure in the development of this branch of economics and the greater part of the book as far as I got in it is about his career and efforts to bring other economists to see things from his point of view He spends a lot of time talking about other economists and their specialties and interests giving credit to those who contributed to his developing ideas He talks about how he got jobs at various universities who he worked with the papers they wrote the walks they took etc Which might possibly be of interest to me if I knew enough about economics to recognize and be impressed by all the significant figures he mentions But I don t So Not bad just too specialized or outside my areas of interest

Richard H. Thaler Ö 8 characters

review Ð eBook, ePUB or Kindle PDF Ö Richard H. Thaler Misbehaving The Making of Behavioral Economics Summary Ý 8 How to make smarter decisions in an increasingly mystifying world He reveals how behavioral economic analysis opens up new ways to look at everything from household finance to assigning faculty offices in a new building to TV game shows the NFL draft and businesses like UberLaced with antic stories of Thaler’s spirited battles with the bastions of traditional economic thinking Misbehaving is a singular look into profound human foibles When economics meets psychology the implications for individuals managers and policy makers are both profound and entertaining. It was once a cliche that economics theory dealt only with completely rational human beings under the principle that this was the only way to develop workable models Even though classical economists from Smith to Keynes had acknowledged that human behavior often deviated from the rational the models persisted in this foundation I guess the theory was that deviations from the rationale would be okay because human behavior would vary in random ways and the rational average would still holdThat this ridiculous assumption has been largely set aside is due to the work of a few remarkable people such as Daniel Kahnemann see Thinking Fast and Slow Robert Shiller of Case Shiller Home Price Index fame Amos Tversky and others including Richard Thaler author of this book and previously Nudge These economists and psychologists bridged the wide gap between these disciplines and created behavioral economics demonstrating that in the real world humans tend to exhibit the same non rational behavior over and over again The assumpion that Humans behave like Econs is simply wrong and demonstrably so in real experimentationThaler provides a history of behavioral economics his role and that of the other giants It s a fascinating walk through the creation of a discipline and a peek into the world of academia which can be incredibly vain and pettyThroughout Thaler blends fascinating if now familiar stories about human irrationalities the Supposedly Irrelevant Factors across finance fairness and many other topics I especially enjoyed the case study of how the Chicago School of Economics allocated new offices even though the faculty of this school are all strong rationalists who would rationally auction off kidneys to the highest bidder they didn t allocate their offices that way at all but rather by seniority and lottery What is good for the goose is not always good for the ganderIf the topic interests you at all it s a great great read Thaler is an engaging funny author and he makes difficult topics easy to read Check it out

  • Hardcover
  • 432
  • Misbehaving The Making of Behavioral Economics
  • Richard H. Thaler
  • English
  • 26 March 2018
  • 9780393080940