Boy, behavioral economics is everywhere these days! As a self-proclaimed “behavioral expert” I often get people asking me for a reading list. I’m sick and tired of rewriting this five times a day, so here goes: the definitive, well-ordered, short (looking at you, Shane Parrish) behavioral economics reading list.
- Influence (Robert Cialdini). This is a quick read, flashy and fun but substantive. Cialdini finds behavioral economics everywhere and the book is almost written as a guide for used car salesmen or other hucksters. He does a great job of weaving in the academic research with existing sales practices. For years I’ve been planning to hire a graphic designer to make a poster of Cialdini’s Six Principles of Influence — you know, if you’re looking for gift ideas.
- Nudge (Thaler and Sunstein). The book that got everyone talking. Thaler and Sunstein distill the literature into really digestible behavioral principles and focus on applying those principles to policy-making. The authors are pretty cool as well: Thaler is a perennial Nobel bridesmaid; Sunstein is a prominent “jurist”. whatever that means; and I can’t ignore writer-in-part John Balz who is now evangelizing everywhere about Chief Behavioralists.
- Thinking Fast and Slow (Kahneman). Take off the water wings, put on your goggles and inhale: you’re diving into the deep end. You will never see the world the same way and you will piss off friends and family with the names of behavioral effects. More important, you will actually understand the effects you name, and you will apply them correctly. You will remember the studies that uncovered them. You will understand the complex way they inter-relate. You will consider getting a PhD in behavioral economics. Your life will be better than it was.
- Poor Economics (Bannerjee and Duflo). An important look at how behavioral economics and randomized controlled trials are breathing new life into tired debates about development. Compared to the other books on my list, this book has a lot more field studies, impact evaluations, and non-Western research participants.
- Scarcity (ideas42 co-founders Mullainathan and Shafir): A fascinating new branch of research on how “scarcity captures the mind”. Turns out, as best the authors can tell, poor people are not optimizing under constraints. They are not genetically less capable than the rich. They are not suffering from a unique culture of poverty. Instead, the condition of being poor leads to making choices that are systematically different (better in some ways and worse in others), and you would do the same if you were poor. In fact, you do the same thing when you’re short on time. They don’t talk about this, but at some level this must be connected to the cognitive metaphors we use to understand time and money.
What other behavioral economics books do you consider must-reads?