Reviews
I studied economics in college and have grown rather bored with it over the years, switching my career to software engineering. This book was a reminder to me of the people still doing interesting work in the field. The book is very easy to follow and was a real page turner for me.
4.5🌟
Great book on the importance of accounting for real human behavior when designing economic policy. Thaler posits that traditional economic models assume that all human beings behave rationally in their best interest, but this requires far too much energy and knowledge to be true at all times. The book goes into many good examples of how we as a society behave irrationally, when compared to predicted behavior, and how this can lead to drastically different policies if accounted vs. not. A few notes I took from the book: 1. Traditionally, economic models pretend that all humans are "econs", perfectly rational and capable of optimizing every minor decision. Social studies demonstrated this is not the case (auto enroll in pension plans, farmers in India not using fertilizers, etc. ) 2. Many implications of this deviation from rational behavior: someone would drive 20 minutes to save $10 on a $20 purchase, but not on a $500 purchase. This sounds crazy when I write it this way, but when put into perspective we see how this happens very often. 3. In retrospect, people misremember their ability to predict an event. For example, after Obama won, many would say they saw that coming. In reality, few did. This makes it hard for folks to take risks a CEO asks for, since if they fail the CEO will say they should have foreseen the factors that caused then to fail. This can, to the company's detriment, lead to a culture of keeping things too safe for the company to grow.
