Economic Theory Confronts Psychological Reality and Adapts, Reluctantly

Reviews the book, MISBEHAVING: The Making of Behavioral Economics by Richard H. Thaler (see record 2015-22902-000). This book is Thaler’s intellectual autobiography. It is a humble and marvelously entertaining account of his four-decade-long journey to convince fellow economists that they can’t ignore the human element of decision making—that there are just too many behavioral anomalies that are unexplainable by the standard economic theory. It would be a great book for an economist. And, if you’re an investor, market researcher, or anyone involved with public policy, it’s very likely you will love it too. Psychologists? Well, you should at least be amused if not intrigued by the evolution of economic thinking toward behaviors you’ve understood all along. (PsycINFO Database Record (c) 2016 APA, all rights reserved)