“My only advice for reading the book is stop reading when it is no longer fun.” – Thaler, Misbehaving

Economics is tremendously influential today, perhaps with some justification. Unlike many social sciences, it works from a single unified body of theory, based on the idea that people optimize. Paired with the mathematical tools of constrained optimization and equilibrium, that cohesiveness has given it significant strength. It isn’t correct, of course, but it’s a useful model, and empirical research doesn’t depend on it anyway. Thaler, however, has championed the push to expand theoretical models to include other factors, enriching the models and leading to behavioural economics.

Dick Thaler is a past president of the American Economics Association, a professor of behavioural economics at the University of Chicago, and an all-around swell guy (really – I’ve seen him speak, and he seemed great). Nudge, a previous book of his, has been a huge bestseller and tremendously influential in governments around the world. Misbehaving is less directly applicable, but just as well written and, for me at least, just as interesting.

Misbehaving tells the story of the history of behavioural economics, which conveniently for Thaler is also basically a biography of him. The book provides a solid introduction to behavioural econ, though perhaps not as thorough as Thinking Fast and Slow, but has the added advantage of also providing a great summary of the history of economics more generally, since at each stage it contrasts behavioural and typical economics.

Whether you’re wondering why people don’t sell wine that has appreciated in value, even if they wouldn’t buy such expensive wine, why people pay more for beer when it’s sold at a resort, or even if you have questions that don’t involve alcohol, Misbehaving is a great book. It will be more entertaining if you know a bit of economics already, but even if you don’t, I think it’s a great introduction to the field and to how the field has evolved in the past 40 years. Plus, behavioural economics is awesome!