Richard H. Thaler
Traditional economics assumes we are perfectly rational calculating machines, but real humans are emotional, biased, and reliably irrational. Discover how injecting psychology into economics explains our actual financial behavior and market anomalies.
People irrationally assign greater value to items simply because they own them, creating a wedge between what they will pay to acquire something and what they demand to sell it.
Rather than treating all money as identical, individuals divide their wealth into subjective mental accounts, which explains why people simultaneously hold high-interest debt and low-yielding savings.
Consumer choices are heavily driven by the perceived fairness of a deal rather than just the objective value of the item, making discounts and sales highly effective psychological tools.