Misbehaving by Richard Thaler: Summary & Mind Map

Book Worm • 28 March 2018

One Sentence Summary

  • This book covers the core concepts of behavioral economics, supplemented by stories, anecdotes and occasional reposts to past combatants’ that misses two important issues ‘relating to suggestions for the future development of behavioral economics’

 

Best Quotes

“Many people have made money selling magic potions and Ponzi schemes, but few have gotten rich selling the advice, “Don’t buy that stuff.” 

“Worldly wisdom teaches that is it is better for reputation to fail conventionally than to succeed unconventionally.” 

“The purely economic man is indeed close to being a social moron. Economic theory has been much preoccupied with this rational fool.” 

 

Key Takeaways

  • Misbehaving is divided into eight sections that take us chronologically through Thaler’s academic career, starting at the University of Rochester as a graduate student with a burning curiosity about how people behave in the real world.
  • Some managers may not understand the concept of maximizing profits by equating marginal cost to marginal revenue, but they behave as if they did.
  • Another criticism of the behavioral school was that although consumers and perhaps business managers might make mistakes, the stakes were small and the limited opportunities to exploit those mistakes made them unimportant.
  • Thaler concludes the book with a section devoted to how these behavioral concepts can be used to “nudge” individuals into behaving optimally.

 

About author

  • Richard H. Thaler (born September 12,1945) is an American economist. In 2015, Thaler was president of the American Economic Association.
  • In 2017, he was awarded the Nobel Memorial Prize in Economic Sciences for his contributions.

 

Misbehaving by Richard Thaler: Summary & Mind Map
Misbehaving by Richard Thaler: Summary & Mind Map

 

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