science

Misbehaving: The Making of Behavioral Economics

Misbehaving: The Making of Behavioral Economics is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Misbehaving: The Making of Behavioral Economics rather than just read about it. In short: Misbehaving: The Making of Behavioral Economics is a book by Richard Thaler, economist and professor at the University of Chicago's Booth School of Business and winner of the 2017 Nobel Prize in Economics. The book builds on Thaler's work as a behavioral economist in trying to present an alternate view point that humans bring along behavioral biases, are error prone, and are not always rational.

Key takeaways

Misbehaving: The Making of Behavioral Economics belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Misbehaving: The Making of Behavioral Economics to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Misbehaving: The Making of Behavioral Economics from memory before moving on to harder problems.

Reference excerpt

Misbehaving: The Making of Behavioral Economics is a book by Richard Thaler, economist and professor at the University of Chicago's Booth School of Business and winner of the 2017 Nobel Prize in Economics. The book builds on Thaler's work as a behavioral economist in trying to present an alternate view point that humans bring along behavioral biases, are error prone, and are not always rational. This view point builds on his work from his previous book, Nudge, published in 2008. Thaler ties this to the effect on markets, which are otherwise expected to be efficient. Thaler uses the book to talk to readers about how behavioral economic analysis can help look at areas ranging from household finance, to TV shows, National Football League Drafts and emerging disruptive businesses like Uber, in a new light.

References

Worked examples

Example 1 — a first encounter with Misbehaving: The Making of Behavioral Economics

Start with the simplest possible case. Write down what Misbehaving: The Making of Behavioral Economics claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Misbehaving: The Making of Behavioral Economics before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Misbehaving: The Making of Behavioral Economics ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Misbehaving: The Making of Behavioral Economics

In research: Misbehaving: The Making of Behavioral Economics appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Misbehaving: The Making of Behavioral Economics in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Misbehaving: The Making of Behavioral Economics is common in secondary-school and first-year university syllabi. It links to neighbouring topics 2015 non-fiction books, Business books, Economics and finance book stubs, so understanding it makes those chapters shorter.
In everyday life: Look for Misbehaving: The Making of Behavioral Economics outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Misbehaving: The Making of Behavioral Economics in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Misbehaving: The Making of Behavioral Economics means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Misbehaving: The Making of Behavioral Economics out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Misbehaving: The Making of Behavioral Economics in simple terms?

Why does Misbehaving: The Making of Behavioral Economics matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Misbehaving: The Making of Behavioral Economics?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Misbehaving: The Making of Behavioral Economics.