The best behavioral economics books

Many authors have picked their favorite books about behavioral economics and why they recommend each book.

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Stumbling on Happiness

By Daniel Gilbert,

Book cover of Stumbling on Happiness

Knowing what we want can be tricky. In order to do that, we need to imagine our future selves and guess what they will be satisfied with. Surprisingly, knowing what you want might be much trickier than you think. Gilbert's book is full of insights and scientific discoveries about human nature that are fascinating, witty, and many times insightful. Happiness is a state of mind, and the mind is full of surprises.

Who am I?

As I was writing The Coincidence Makers I found out I am not writing about coincidences, at all. I found out I was writing about fate and free will, about the way we make choices, and how these choices affect us, define us and change us. Choices and the way they build our happiness is the theme of this list, which is made out of books that I read before or during the writing process of my own (fiction) book, and probably influenced it, one way or another.

I wrote...

The Coincidence Makers: A Novel

By Yoav Blum,

Book cover of The Coincidence Makers: A Novel

What is my book about?

Guy, Emily, and Eric are three seemingly ordinary people who work for a secret organization devoted to creating and carrying out coincidences. What the rest of the world sees as random occurrences, are, in fact, carefully orchestrated events designed to spark significant changes in the lives of their targets—scientists on the brink of breakthroughs, struggling artists starved for inspiration, loves to be, or just plain people like you and me…

But a secret mission, a killer who can't hurt a fly, and memories from previous lives are going to change all that and teach them about the true nature of fate, free will, and the real meaning of love.

The Myth of the Rational Market

By Justin Fox,

Book cover of The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street

Perhaps no academic theory has had a more pernicious impact on how we understand and regulate the markets than the “rational market hypothesis” – the theory that “markets know best” and work best if left alone. Justin Fox explains the rise, the rule, and the ruin of this powerful but fundamentally flawed idea in a remarkably engaging way. A delight to read!

Who am I?

When I first started covering Wall Street as a reporter, I faced a steep learning curve. I had always loved history, but I knew almost nothing about the history of Wall Street itself. I started educating myself -- and what began as a utilitarian effort to do my job better became a life-changing passion. Too often, financial history gets written for analysts and academics; it was a rare joy to find writers who told these wonderful Wall Street tales in an engaging, accessible way. That became my goal as an author: to write financial history in a way that could fascinate the general reader.

I wrote...

A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History

By Diana B. Henriques,

Book cover of A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History

What is my book about?

Black Monday – October 19, 1987 – was a crash that nearly broke the machinery of the American market. But Black Monday didn’t come out of nowhere. It was the result of years of extraordinary but little-noticed changes on Wall Street and in Washington that set the stage for the crash – and that continue to shape our financial life today. Understanding how Black Monday happened is essential to understanding how it could happen again. 

Carrots and Sticks

By Ian Ayres,

Book cover of Carrots and Sticks: Unlock the Power of Incentives to Get Things Done

Hyperbolic discounting is a term used in behavioral economics to describe our tendency to overvalue immediate gratification while undervaluing future rewards. When asked to choose between getting (A) one apple a year from now or (B) two apples a year and a day from now, people pick (B). However, if the choice is between getting (A) one apple today or (B) two apples tomorrow, people find (A) more attractive. Why is it so difficult to acquire good habits, like going to bed early or getting important work done, instead of playing with our smartphone? The idea of hyperbolic discounting offers a brilliant explanation, shedding light on the troublesome natures we humans possess. Although that’s not the main focus of this book, it’s still an excellent, easy-to-read introduction to behavioral economics.

Who am I?

When I became a minimalist, I found that having less made my household chores so much easier. Before then, I thought I was a loser who lets dirty dishes and laundry pile up. But when my environment changed, what I had believed was my personality also shifted. Once my apartment was tidy, it became a habit to do the dishes right away and vacuum the floor before going out, and my life became consistently enjoyable. But other habits were harder nuts to crack, like quitting drinking or exercising regularly. In Hello, Habits I write about my journey of acquiring these habits through a process of trial and error.

I wrote...

Hello, Habits: A Minimalist's Guide to a Better Life

By Fumio Sasaki,

Book cover of Hello, Habits: A Minimalist's Guide to a Better Life

What is my book about?

Fumio Sasaki changed his life when he became a minimalist. But before minimalism could really stick, he had to make it a habit. All of us live our lives based on the habits we’ve formed, from when we get up in the morning to what we eat and drink to how likely we are to actually make it to the gym. In Hello, Habits, Sasaki explains how we can acquire the new habits that we want―and get rid of the ones that don’t do us any good.

Drawing on leading theories and tips about the science of habit formation from cognitive psychology, neuroscience, and sociology, along with examples from popular culture and tried-and-tested techniques from his own life, he unravels common misperceptions about "willpower" and "talent," and offers a step-by-step guide to success.

Tap, Click, Read

By Lisa Guernsey, Michael H. Levine,

Book cover of Tap, Click, Read: Growing Readers in a World of Screens

Tap, Click, Read was one of the first books to describe reading with screens in a balanced and measured way. I liked that the authors engaged with a range of research studies and outlined the significant potential of digital books for children’s literacy development, particularly if the books are designed with research principles in mind. The book inspired me to write in jargon-free language when communicating research to non-academic audiences. I loved the many examples in the book illustrating how young children tap, click and indeed read with modern interactive screens.

Who am I?

As an avid reader, I have been fascinated by children’s reading development and began researching this topic with a specific interest in the personal motivation of young readers. I examined children’s reading in various digital formats, including e-books made by families and children themselves. Today, I work as Professor in Norway and the UK and enjoy working across academia and industry. I feel very passionate about communicating research in an accessible way to children’s teachers, caregivers, and policy-makers. The books on my list do this exceptionally well, and I hope you will enjoy them as much as I did.

I wrote...

The Future of the Self: Understanding Personalization in Childhood and Beyond

By Natalia Kucirkova,

Book cover of The Future of the Self: Understanding Personalization in Childhood and Beyond

What is my book about?

"Kucirkova provides a much-needed nuanced understanding of the impact of personal data economy on today’s children. She describes the various forms of personalized childhoods, including selfies, avatars, digital personalised books, story apps, or toys. The book critically examines the key changes that have taken place in representations of self in the 21st century and their impact on families and children’s learning. The many ways in which personal data are collected, enhanced, and distributed by technologies are discussed against the backdrop of broader societal trends, such as globalization, technologisation, and personal data economy. The book provides a balanced account of the positives and negatives of personalisation on children’s identity, key learning outcomes, and socio-emotional development."

The Coaching Habit

By Michael Bungay Stanier,

Book cover of The Coaching Habit: Say Less, Ask More & Change the Way You Lead Forever

The brilliance of The Coaching Habit lies in its simplicity – it provides seven effective questions leaders can utilize to improve their impact and influence. It is full of practical, actionable tools that can be implemented immediately to deepen connections and empower others to do their best work. While this book is a quick, easy, and enjoyable read – it is incredibly profound and powerful. 

Who am I?

I’m a professional keynote speaker and author that has long been fascinated with tenants of high performance. When I began, I was curious about how high performance could lead to increased achievement and accomplishment. Now, I am fascinated by how high performance can lead to heightened happiness and fulfillment. Thus, I love reading, watching, and listening to any resource that can help improve the quality of my life… so that I can pay that forward and improve the quality of life for those I serve. I believe a candle loses nothing by lighting another candle. 

I wrote...

Sustain Your Game: High Performance Keys to Manage Stress, Avoid Stagnation, and Beat Burnout

By Alan Stein Jr., Jon Sternfeld,

Book cover of Sustain Your Game: High Performance Keys to Manage Stress, Avoid Stagnation, and Beat Burnout

What is my book about?

Sustain Your Game is for anyone who is looking to improve their performance consistently year after year without feeling burned out, hyper-stressed, or overwhelmed. It is for high performers who want to learn practical strategies and actionable steps on how to maintain a high standard of excellence… while enjoying the journey!  

It examines how the highest performers across a plethora of industries have been able to create long-term success while simultaneously managing unparalleled pressure and stress.  It unpacks their standards, systems, and strategies and provides proven principles that can be implemented immediately to create unparalleled achievement… and sustainable fulfillment…  in every area of life.

The Warren Buffett Way

By Robert G. Hagstrom,

Book cover of The Warren Buffett Way

While Graham is the pioneer of value investing, there’s no question that his student, employee, and, ultimately, close friend Warren Buffett is its most successful practitioner. Although the essence of their respective approaches is similar, there are some important differences to understand. As the best book about Buffett’s investing style that I’ve encountered thus far, Hagstrom’s The Warren Buffett Way highlights some of Buffett’s most astonishing investment coups and the logic behind them. Upon reading both of those books, the reader will have gained a nuanced understanding of how Buffett took the Graham approach to business valuation/security selection and improved upon it. 

Who am I?

As an investor and a professional business valuation specialist, I have a passion for understanding the true intrinsic value of both publicly-traded and closely-held (private) companies. There’s no denying that Warren Buffett, emulating the example of his mentor Benjamin Graham, applied a private company valuation approach to the selection of publicly-traded stocks and the results speak for themselves. Furthermore, given my somewhat technical educational and vocational background, I am more comfortable than most valuators with highly technical and IP-weighted businesses. That is why I consider IP valuation to be an integral element of business valuation. 

I wrote...

The Einstein Money: The Life and Timeless Financial Wisdom of Benjamin Graham

By Joe Carlen,

Book cover of The Einstein Money: The Life and Timeless Financial Wisdom of Benjamin Graham

What is my book about?

Warren Buffett – widely considered the most successful investor of all time – has repeatedly acknowledged Benjamin Graham as the primary influence on his investment approach. Indeed, there is a direct line between the record-shattering investing performance of Buffett (and other value investors) and Graham's life. In six books and dozens of papers, Graham-known as the "Dean of Wall Street," left an extensive account of an investing system that, as Buffett can attest, actually works!

This biography of Benjamin Graham, the first written with access to his posthumously published memoirs, explains Graham's most essential wealth-creation concepts while telling the colorful story of his amazing business career and his multifaceted, unconventional personal life. The author distills the best from Graham's extensive published works and draws from personal interviews.

Thinking, Fast and Slow

By Daniel Kahneman,

Book cover of Thinking, Fast and Slow

Thinking Fast and Slow is Daniel Kahneman’s distillation of a lifetime’s work into a highly readable volume for general audiences. Kahneman and his late collaborator Amos Tversky, both psychologists, shared the Nobel Prize in Economics for their groundbreaking work that helped establish the field of behavioral economics. In Thinking Fast and Slow, Kahneman tells the story of how we make decisions, and how our reliance on cognitive shortcuts leads to predictable errors. He manages to convey complex ideas in common language without talking down to his readers. It's a must-read for anyone who wants to examine their decision-making principles and practices.

Who are we?

The three co-authors of The Smart Mission: NASA’s Lessons for Managing Knowledge, People, and Projects have been at the center of organizational and leadership transformation. Dr. Ed Hoffman was NASA’s first Chief Knowledge Officer and the founding Director of the NASA Academy of Program, Project, and Engineering Leadership (APPEL). Matthew Kohut is the managing partner of KNP Communications. He has prepared executives, elected leaders, diplomats, scientists, and public figures for events ranging from television appearances to TED talks. Laurence Prusak was the founder and executive director of the IBM Institute for Knowledge Management and one of the founding partners for the Ernst and Young Center for Business Innovation.

We wrote...

The Smart Mission: NASA’s Lessons for Managing Knowledge, People, and Projects

By Edward J. Hoffman, Matthew Kohut, Laurence Prusak

Book cover of The Smart Mission: NASA’s Lessons for Managing Knowledge, People, and Projects

What is our book about?

At NASA, people say, “You come for the mission and stay for the people.” This is the essence of a “smart mission.” It begins with understanding the importance of both the mission and the human element. 

We recognize the project as the basic unit of work in many industries and organizations. Software applications, antiviral vaccines, and spacecraft are all produced by teams and managed as projects. Project management traditionally emphasizes control, processes, and tools—but human skills and expertise, not technical tools, are the keys to project success. Projects run on knowledge. This paradigm-shifting book—by three experts with decades of experience at NASA and elsewhere—challenges the conventional wisdom on project management by focusing on intangibles: knowledge, learning, collaboration, teaming, story, and culture.

The Undoing Project

By Michael Lewis,

Book cover of The Undoing Project: A Friendship That Changed Our Minds

If I ever assumed my decisions were the result of a carefully reasoned analysis of factual information, The Undoing Project would derail that comfortable belief. It is the story of the creative collaboration of two remarkable thinkers, Daniel Kahneman and Amos Tversky, whose work would overturn an idea at the center of most prior economic theory, the idea that people’s economic decisions are based on rational self-interest. The intense working friendship of these two men is a gripping story, and Michael Lewis brings the personal side to vivid life while also conveying the essence of their revolutionary thinking in lucid and approachable prose.

Who am I?

As a novelist, I am endlessly curious about people and like hearing their stories. As an erstwhile computer programmer and farmer, I also have a lifelong interest in science and natural history. When I find those two divergent interests have cross-pollinated in a single gracefully-written book, I am a very happy reader. I love books that weave together an intriguing scientific question with the human story of the scientists pursuing an answer to that question.

I wrote...

Tracking a Shadow: My Lived Experiment with MS

By Edith Forbes,

Book cover of Tracking a Shadow: My Lived Experiment with MS

What is my book about?

When I experienced my first episode of multiple sclerosis in 1993, no treatments existed. The doctors said there was nothing to be done. I was raised by a mother whose early widowhood had left her with seven young children, a ranch in Wyoming, and an ambition to change the world.  She did not like the phrase “nothing to be done” and neither did I.

I immersed myself in the medical literature, and thanks to my background in agriculture, I noticed a possible dietary factor in MS that was not being talked about. That observation launched me on a self-designed experiment that continues to this day. Tracking a Shadow tells the story of that experiment and the mother who taught me to ask questions.  

The Three Skills of Top Trading

By Hank Pruden,

Book cover of The Three Skills of Top Trading: Behavioral Systems Building, Pattern Recognition, and Mental State Management

Professor Hank Pruden's book covers a more holistic perspective as he develops elements of system building, pattern recognition, and mental state discipline.

In the technical section he teaches us key concepts of the Wyckoff Method such as the protocolization of the development of accumulation and distribution structures through phases, a fundamental contribution to the Wyckoffian community.

Who am I?

I am Rubén Villahermosa, independent trader and author. My logical and rational mind led me to question the why of market movements, which allowed me to learn the principles of the Wyckoff method. I have deepened in the study of the interaction between supply and demand through high-level Technical Analysis tools such as Wyckoff, VSA, Price Action, Volume Profile, and Order Flow; knowledge that I share through my books from principles of honesty, transparency, and responsibility.

I wrote...

The Wyckoff Methodology in Depth

By Rubén Villahermosa,

Book cover of The Wyckoff Methodology in Depth

What is my book about?

Are you tired of losing money in the stock market? Have you tried countless trading methods and none of them work? Get rid of everything that didn't work for you and learn a professional approach: The Wyckoff Method.

Ruben Villahermosa, Amazon bestseller and independent trader, has refined and improved some of the most powerful concepts of stock market trading and makes them available to you in this book so that you too can benefit.

Bookshelves related to behavioral economics