Why are financial markets and housing markets so prone to bubbles? Why doesn't rising prosperity make people happier? Why do many people contribute generously to charity but fail to save for their own retirement? What is the economic answer to global warming? These questions all involve behaviour that many would regard as irrational - and market outcomes that are far from ideal. Standard economics has been dominated by rational choice models, which regard the free market as a giant super-computer that magically coordinates the activities of consumers and firms, to the benefit of all. Using fascinating new insights from behavioural economics, and vivid contemporary and historical examples, Cassidy shows how people's myopia, gullibility, copycat behaviour, overconfidence, loss aversion, and sense of altruism and fairness all help us understand the world in ways that rational choice economics does not. This is the book that both explains the current moment and explains past and future such moments. We will continue to get things wrong. But at least now we will be having the right conversation.
- ISBN10 0374173206
- ISBN13 9780374173203
- Publish Date 10 November 2009 (first published 1 November 2009)
- Publish Status Out of Print
- Out of Print 21 April 2016
- Publish Country US
- Imprint Farrar Straus Giroux
- Format Hardcover
- Pages 390
- Language English