Top 10 Best Books On Behavioral Economics

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Economics believes that individuals make rational choices in a marketplace. However, Behavioral Economics (BE) recognizes that that’s unlikely. You won't be ... read more...

  1. Daniel Simons and Christopher F. Chabris are cognitive psychologists who have won awards for their work on a variety of themes. Their "Gorillas in Our Midst" study reveals the dark side of our ability to pay attention and has quickly become one of the most well-known experiments in psychology; it inspired a stage play and was even discussed by characters on C.S.I. Chabris, a psychology professor at Union College in New York, received his Ph.D. from Harvard. Simons, a Cornell Ph.D. recipient, is a psychology professor at the University of Illinois.


    Reading this book will make you less confident in yourself, which is a good thing. In The Invisible Gorilla, the founders of one of psychology's most renowned studies, Christopher Chabris and Daniel Simons, utilize incredible stories and paradoxical scientific findings to show a crucial truth: our minds don't work the way we believe they do. We believe we see ourselves and the world as they truly are, yet we are actually missing a great deal.


    Chabris and Simons use the work of other researchers as well as their own studies on attention, perception, memory, and reasoning to show how incorrect intuitions frequently lead to problems. They explain in the process: "Why would a firm invest billions of dollars to market a product that its own experts predict would fail? How a cop might walk right past a horrible assault without noticing it Why are award-winning films riddled with editing flaws? What criminals and chess experts have in common Why are measles and other childhood diseases resurfacing? Why investors may learn a lot from weather forecasters?"


    We repeatedly believe we are experiencing and comprehending the world as it is, but our minds are plagued with everyday illusions. We design traffic laws and construct criminal cases on the notion that people will notice when something out of the ordinary occurs right in front of them. We're certain we remember where we were on 9/11, mistakenly believing that vivid recollections are perfectly etched into our minds. And as a culture, we spend billions of dollars on brain-training technologies because we are constantly enticed by the promise of quick solutions and effortless self-improvement.


    The Invisible Gorilla exposes the numerous ways in which our intuitions can deceive us, but it is much more than a list of human flaws. Chabris and Simons describe why we fall victim to ordinary illusions and what we can do to protect ourselves from their consequences. Finally, the book delivers an x-ray glimpse into our own minds, allowing us to see beyond the veil of illusions that clouds our thinking and think clearly for the first time.


    Author: Daniel Simons and Christopher F. Chabris

    Link to buy: https://www.amazon.com/dp/0307459667/

    Ratings: 4.5 out of 5 stars (from 778 reviews)

    Best Sellers Rank: #154,640 in Books

    #286 in Medical Applied Psychology

    #287 in Medical Neuropsychology

    #420 in Medical Cognitive Psychology

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  2. Robert Cialdini is a pioneering social impact researcher. He is a Regent's Professor of Psychology at Arizona State University and the president of Influence at Job, a consultancy firm that teaches business employees how to apply his study findings in their daily work. He offers roughly sixty seminars every year to prestigious business organizations and enterprises.


    Dr. Robert B. Cialdini, the seminal specialist in the subject of influence and persuasion, discusses the psychology of why people say yes and how to use these concepts ethically in business and everyday circumstances in this highly praised New York Times bestseller.


    In Influence: The Psychology of Persuasion, you will learn the six universal principles of persuasion and how to apply them to become an effective persuader, as well as how to defend yourself against deceptive influence attempts:

    • Reciprocation: The internal desire to reciprocate what someone else has given us.
    • Promise and Consistency: Once we make a decision or take a stand, we strive hard to follow through on that commitment in order to defend our actions.
    • Social Proof: When we are hesitant, we look to comparable people to guide us in the right direction. And the more individuals who take that action, the more we believe it is correct.
    • Liking: The proclivity to agree with people we like, as well as the proclivity for others to agree with us if we like them.
    • Authority: We are more prone to agree with those who are authorities, who have more information, experience, or competence.
    • Scarcity: We seek more of what is scarce or declining in supply.


    Understanding and applying the six ethical standards is free and deceptively simple. Dr. Cialdini's 35 years of evidence-based, peer-reviewed scientific research, as well as a three-year field study on what motivates people to alter behavior, back up this claim. Influence is a detailed guide to effectively applying these ideas to increase your capacity to influence the behavior of others.


    Author: Robert B. Cialdini

    Link to buy: https://www.amazon.com/dp/0688128165/

    Ratings: 4.6 out of 5 stars (from 9691 reviews)

    Best Sellers Rank: #589,174 in Books

    #885 in Medical Applied Psychology

    #1,412 in Popular Applied Psychology

    #4,234 in Psychology (Books)

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  3. The 2017 Nobel Prize in Economics was awarded to Richard H. Thaler. He is the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics and the director of the Center for Decision Research at the University of Chicago's Booth School of Business.


    Cass R. Sunstein is a Harvard Law School Robert Walmsley University Professor and the creator and director of the Program on Behavioral Economics and Public Policy. He is by far the most referenced legal professor in America. He was the Administrator of the White House Office of Information and Regulatory Affairs during the Obama administration from 2009 to 2012.


    The Economist and the Financial Times named Nudge: Improving Decisions About Health, Wealth, and Happiness a Best Book of the Year. It is also one of the best books on behavioral economics.


    Every day, we make decisions on what to buy or eat, financial investments, our children's health and education, and even the causes we support or the planet itself. Unfortunately, we frequently make poor decisions. Nudge is concerned with how we make these decisions and how we may make better ones. Nobel Prize winner Richard H. Thaler and Harvard Law School professor Cass R. Sunstein demonstrate, using dozens of eye-opening examples and decades of behavioral science research, that no choice is ever presented to us in a neutral way, and that we are all susceptible to biases that can lead us to make bad decisions. However, by understanding how people think, we may utilize "choice architecture" to encourage people toward the best decisions for themselves, their families, and society, without limiting our freedom of choice.


    Author: Cass R. Sunstein and Richard H. Thaler

    Link to buy: https://www.amazon.com/dp/014311526X/

    Ratings: 4.5 out of 5 stars (from 2650 reviews)

    Best Sellers Rank: #32,459 in Books

    #48 in Sociology of Social Theory

    #225 in Business Decision Making

    #228 in Decision-Making & Problem Solving

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  4. Predictably Irrational, The Upside of Irrationality, and The (Honest) Truth About Dishonesty are all best-sellers by Dan Ariely. He founded the Center for Advanced Hindsight and is the James B. Duke Professor of Psychology and Behavioral Economics at Duke University. His work has appeared in the New York Times, Wall Street Journal, Washington Post, Boston Globe, and other publications.


    How do huge compensation make CEOs less productive? What is vengeance so vital to us? How may perplexing directions benefit us? Why is there a distinction between what we believe will make us happy and what actually does?


    Dan Ariely, a social scientist, revealed the many biases that lead us to make poor decisions in his seminal book, Predictably Irrational. He now explores the startling bad and positive consequences irrationality can have on our lives in The Upside of Irrationality. He focuses on our actions at work and in relationships, offering new insights and eye-opening realities about what truly motivates us at work, how one stupid move may become a long-term poor habit, how we learn to love the ones we're with, and more. The Upside of Irrationality will alter our perceptions of ourselves at work and at home, as well as cast our irrational behaviors in a more nuanced light.


    Predictably Irrational by behavioral economist and New York Times bestselling author Dan Ariely returns to provide a much-needed perspective on the irrational decisions that influence our dating lives, working situations, economic conditions and the desire to cheat in all domains. The Upside of Irrationality will appeal to fans of Freakonomics, Survival of the Sickest, and Malcolm Gladwell's Blink and The Tipping Point.


    Author: Dr. Dan Ariely

    Link to buy: https://www.amazon.com/The-Upside-Irrationality-Unexpected-Benefits/dp/0061995045/

    Ratings: 4.5 out of 5 stars (from 591 reviews)

    Best Sellers Rank: #138,084 in Books (See Top 100 in Books)

    #209 in Probability & Statistics (Books)

    #240 in Marketing & Consumer Behavior

    #527 in Popular Applied Psychology

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  5. Uri Gneezy was born and reared in Israel, where he learned firsthand about applied game theory on the streets of Tel Aviv. Dr. Gneezy is the Epstein/Atkinson Endowed Chair in Behavioral Economics and a professor of economics and strategy at the University of California, San Diego's Rady School of Management.


    John A. List was raised in a working-class family in Wisconsin, where his father hauled trucks for a living, and studied economics in hobby markets. Dr. List is the University of Chicago's Homer J. Livingston Professor of Economics.


    Can economics be exciting? Can it focus on individuals and what truly important to them on a daily basis? And can you assist us comprehend their secret motivations for doing what they do in everyday life?


    Revolutionaries are Uri Gneezy and John List. Their concepts and methods for determining what truly works in tackling major social, business, and economic challenges provide us with a new understanding of the motivations that drive human action. We can then design incentives that motivate people to move mountains, change their behavior, or at the very least obtain a better deal.


    Finding the appropriate incentive, on the other hand, can be like looking for a needle in a haystack. Gneezy and List's innovative method involves embedding themselves in industries, schools, towns, and offices where people work, live, and play. Then, in large-scale field tests conducted "in the wild," Gneezy and List watch people in their natural situations without their knowledge.


    Their randomized experiments have revealed ways to close the achievement gap between rich and poor students, to reduce violence in inner-city schools, to determine whether women are truly less competitive than men, to price products and services correctly, and to discover the true reasons why people discriminate.


    Gneezy and List boarded flights, helicopters, trains, and vehicles to travel from the mountains of Kilimanjaro to California wineries; from hot northern India to the frigid streets of Chicago; and from Israeli school playgrounds to the boardrooms of some of the world's largest enterprises. They take us along for the voyage in The Why Axis, presenting lessons with significant payoffs through fascinating and colorful stories. The book is among the best books on behavioral economics.


    Their groundbreaking, shocking, and urgent revelations about how incentives really function are both revolutionary and enormously useful. This study will alter how we think about and respond to large and little challenges. Instead of making assumptions, we can use evidence to discover what truly works. The technique Gneezy and List explain in The Why Axis can be used by anybody working in business, politics, education, or philanthropy to get a deeper, nuanced understanding of human behavior, as well as a better understanding of what motivates individuals and why.


    Author: John A. List and Uri Gneezy

    Link to buy: https://www.amazon.com/dp/1610393112/

    Ratings: 4.4 out of 5 stars (from 165 reviews)

    Best Sellers Rank: #261,075 in Books

    #241 in Sociology of Social Theory

    #468 in Medical Applied Psychology

    #829 in Popular Applied Psychology

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  6. Predictably Irrational, The Upside of Irrationality, and The (Honest) Truth About Dishonesty are all best-sellers by Dan Ariely. He founded the Center for Advanced Hindsight and is the James B. Duke Professor of Psychology and Behavioral Economics at Duke University. His work has appeared in the New York Times, Wall Street Journal, Washington Post, Boston Globe, and other publications.


    Why do our headaches last after a one-cent aspirin but go away with a fifty-cent aspirin? Why do we splurge on a sumptuous meal then clip coupons to save $25 on a can of soup?


    When it comes to making life decisions, we believe we are making sound, sensible decisions. But are we sure?


    Dan Ariely challenges the widely held belief that humans behave in fundamentally reasonable ways in this freshly revised and extended edition of his landmark New York Times bestseller- Predictably Irrational. We routinely overpay, underestimate, and postpone in everything we do, from drinking coffee to losing weight, from buying a car to choosing a romantic partner. However, these erroneous actions are neither random nor senseless. They're methodical and predictable, which causes us to be predictably irrational.


    Author: Dr. Dan Ariely

    Link to buy: https://www.amazon.com/gp/aw/d/0061353248/

    Ratings: 4.8 out of 5 stars (from 5418 reviews)

    Best Sellers Rank: #6,495 in Books

    #2 in Business Pricing

    #17 in Marketing & Consumer Behavior

    #25 in Popular Culture in Social Sciences

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  7. Robert H. Frank is an economics professor at Cornell's Johnson Graduate School of Management, a New York Times "Economic View" writer, and a Demos Distinguished Senior Fellow. His books include The Winner-Take-All Society (co-written with Philip Cook), The Economic Naturalist, Luxury Fever, What Price the Moral High Ground?, and Principles of Economics (with Ben Bernanke).


    Which economist was greater, Adam Smith or Charles Darwin? The question appears to be ludicrous. After all, Darwin was a naturalist, not an economist. But, according to Robert Frank, New York Times economics columnist and best-selling author of The Economic Naturalist, Darwin will dethrone Smith as the conceptual creator of economics within the next century. Frank contends that Darwin's theory of competition more properly captures economic reality than Smith's. And the ramifications of this reality are substantial. Indeed, failing to acknowledge that we live in Darwin's world rather than Smith's puts us all at risk by failing to see that competition alone will not solve our issues.


    Smith's invisible hand theory, which states that competition channels self-interest for the general good, is probably the most often quoted argument today in support of unfettered capitalism—and against regulation, taxation, and even government itself. But what if Smith's concept was an outlier to the general rule of competition? That is what Frank contends, basing his case on Darwin's observation that individual and group interests frequently diverge significantly. Far from establishing a perfect world, economic rivalry frequently leads to "arms races," encouraging actions that not only inflict enormous harm to the collective but also give no long-term benefits to individuals because any gains are relative and mutually offsetting.


    The good news is that we can control the Darwinian economy. The ideal option is to tax damaging habits rather than prohibit them. We could increase the economic pie, erase government debt, and improve public services without asking painful sacrifices from anyone. Frank admits that is a big claim, but it follows clearly from logic and evidence that most people already accept. The Darwin Economy is one of the best books on behavioral economics.


    In a new afterword, Frank delves deeper into how inequality and competition are influencing today's public debate over how much government we need.


    Author: Robert H. Frank

    Link to buy: https://www.amazon.com/dp/B008W4ASGC/

    Ratings: 4.2 out of 5 stars (from 86 reviews)

    Best Sellers Rank: #591,864 in Kindle Store

    #166 in Macroeconomics (Kindle Store)

    #326 in Economic Theory (Kindle Store)

    #517 in Economic Conditions (Kindle Store)

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  8. Sendhil Mullainathan, a Harvard University professor of economics, is a MacArthur Foundation genius award recipient who studies development economics, behavioral economics, and corporate finance.


    Princeton University's Eldar Shafir is the William Stewart Tod Professor of Psychology and Public Affairs. He does cognitive science, judgment and decision-making, and behavioral economics research.


    Sendhil Mullainathan and Eldar Shafir illustrate in this intriguing book based on cutting-edge research that scarcity creates a distinct psychology for everyone attempting to survive with less than they need.


    Busy people struggle to manage their time for the same reasons that the destitute and those with maxed-out credit cards struggle to manage their money. Scarcity dynamics explain why dieters struggle to resist temptation, why students and busy executives waste time, and why the same sugarcane farmers are sharper after harvest than before.


    Scarcity brings modern life's difficulties into sharper perspective, and Scarcity illustrates not only how it leads us astray, but also how individuals and organizations can better manage scarcity for greater joy and success.


    Author: Sendhil Mullainathan and Eldar Shafir

    Link to buy: https://www.amazon.com/Scarcity-Having-Little-Means-Much-ebook/dp/B00BMKOO6S/

    Ratings: 4.5 out of 5 stars (from 695 reviews)

    Best Sellers Rank: #180,975 in Kindle Store

    #16 in Microeconomics (Kindle Store)

    #83 in Microeconomics (Books)

    #162 in Applied Psychology

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  9. Swarthmore College's Dorwin Cartwright Professor of Social Theory and Social Action is Barry Schwartz. He is the co-author of several books, including Why We Work and Practical Wisdom: The Right Way to Do the Right Thing. Many of his publications have featured in prestigious journals in his profession, including American Psychologist.


    Whether we're buying a pair of jeans, ordering a cup of coffee, choosing a long-distance carrier, applying to college, selecting a doctor, or setting up a 401(k), everyday decisions—both big and small—have become increasingly complex as a result of the overwhelming abundance of options available to us.


    As Americans, we believe that more alternatives equals better options and more happiness. But beware of over-choice: it can cause you to second-guess your decisions before you even make them, establish unreasonably high expectations, and make you blame yourself for any and all failures. In the long run, this can lead to paralysis of decision-making, worry, and chronic stress. And, in a culture that tells us that there is no excuse for falling short of excellence when we have endless possibilities, having too many options can lead to clinical depression.


    Barry Schwartz explains in The Paradox of Choice when choice—the hallmark of human freedom and self-determination that we cherish—becomes damaging to our psychological and emotional well-being. Schwartz explains how the enormous growth in choice—from the ordinary to the profound issues of managing job, family, and individual needs—has paradoxically become a problem rather than a solution in clear, entertaining, and anecdotal prose. Schwartz also demonstrates how our fixation with choice leads us to seek out what makes us feel worse.


    By combining existing social science studies, Schwartz makes the counterintuitive case that reducing choices can significantly reduce stress, anxiety, and busyness in our lives. He provides eleven practical techniques for limiting options to a manageable amount, developing the discipline to focus on the critical ones while ignoring the rest, and finally deriving better satisfaction from the decisions you must make.


    Author: Barry Schwartz

    Link to buy: https://www.amazon.com/Paradox-Choice-More-Less-Revised/dp/0062449923/

    Ratings: 4.4 out of 5 stars (from 1175 reviews)

    Best Sellers Rank: #18,853 in Books

    #32 in Marketing & Consumer Behavior

    #79 in Cultural Anthropology (Books)

    #80 in Popular Culture in Social Sciences

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  10. Daniel Kahneman is the Eugene Higgins Professor of Psychology Emeritus and a professor of public affairs at Princeton University's Woodrow Wilson School of Public and International Affairs. He was awarded the Nobel Prize in Economic Sciences in 2002 for his groundbreaking work on decision-making with Amos Tversky. He wrote the international best-seller Thinking, Fast and Slow.


    System 1 is quick, intuitive, and emotional, whereas System 2 is slower, more deliberate, and rational. The impact of overconfidence on corporate strategies, the difficulty of predicting what will make us happy in the future, and the profound effect of cognitive biases on everything from playing the stock market to planning our next vacation can only be understood by understanding how the two systems shape our judgments and decisions.


    Kahneman engages the reader in a spirited discussion about how we think, revealing where we may and cannot trust our intuitions and how we can reap the benefits of slow thinking. He provides practical and illuminating insights into how we make decisions in both our professional and personal lives, as well as how we can employ various tactics to avoid the mental blunders that frequently get us into difficulty. Among the best books on behavioral economics, Thinking, Fast and Slow was named one of the ten best books of 2011 by The New York Times Book Review and won the National Academy of Sciences Best Book Award and the Los Angeles Times Book Prize.


    Author: Daniel Kahneman

    Link to buy: https://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374275637/

    Ratings: 4.6 out of 5 stars (from 27929 reviews)

    Best Sellers Rank: #4,425 in Books

    #25 in Medical Cognitive Psychology

    #29 in Popular Applied Psychology

    #40 in Cognitive Psychology (Books)


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