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Book review

Misbehaving

How behavioural economics went from a list of anomalies on a blackboard to a Nobel prize, by the man who kept the list.

Misbehaving by Richard Thaler

Illustration of a bare tree over a faint grid, overlaid with rust-red, pale blue and black-spotted circles
Growth, measured and unmeasured. Photograph: The Unreasonable Human

Understanding people turns out to be a more urgent task than changing them, and a great deal harder. In the studies we have, the effect is modest, reliable and almost entirely ignored by the people it describes. We describe the departure from the model as an error. We might equally describe the model as a hopeful guess about us. A better account of fairness would begin with the ordinary case rather than the laboratory one.

What it gets right

The textbook treats fairness as a preference to be revealed. In practice it is a story we tell ourselves after the fact. A better account of fairness would begin with the ordinary case rather than the laboratory one. A pattern this consistent is not a character flaw. It is a design feature, and design features can be worked with. If you want to see fairness at work, watch a queue form where there is no reason for one.

Nobody sets out to be governed by the slow lane, yet it shapes an astonishing share of the ordinary day. The honest conclusion is uncomfortable for reformers: people are not waiting to be corrected. A better account of fairness would begin with the ordinary case rather than the laboratory one. None of this is new. Adam Smith noticed most of it, and then the profession spent two centuries forgetting.

EconomicsBehaviour
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Tomas Lindqvist

Data journalist and recovering statistician who would rather show you the distribution than tell you the mean.

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