Review: Misbehaving: The Making of Behavioral Economics

Thaler's Misbehaving is a good history of the "Behavioral Economics", and it goes over some of the main ideas of behavior economics. However, it is apparent that it never really unifies together. It is a "module" that rides atop standard economic theory. It is a list of phenomena that trace themselves to basic human psychology, but end up costing society billions of dollars.

The closest it seems behavioral economics has ever gotten to giving us an answer to how to govern our society's is through libertarian paternalism. But what it really does is destroy the right-wing notions that the economy is a perfectly smart distributor of goods and services. Instead it is made out of humans, and humans are dumb.

I recommend this if you want a overview of the history of behavioral economics and how it fits with regular economics, but I think you ought to read Nudge by Thaler if you want any of the guidance it contains.

Review: Algorithms to Live By: The Computer Science of Human Decisions

Algorithms to Live by is a self-help book disguising itself as a pop-psychology book but it is ACTUALLY a pop-computer science book. This misunderstanding comes from the title: "The Computer Science of Human Decisions" sounds like regular cognitive psyche 101, but that's not what the book is actually about. Instead, it is "human decisions which ought to be corrected by computer science." That is a big change, and it turns the book into something very interesting.

Computers and computer science are a very interesting field that sits at the combination of physics, mathematics, philosophy, and psychology. I don't think it is possible to be good at it without having a moderate understanding of those fields (and I believe that the interview questions posed during tech interviews are indicative of this being true). Algorithms to Live By makes this combination very clear. The structure of the book is repeated in a powerful (algorithmic!?) way: Explain a human problem, explain how a computer/math algorithm might answer that problem, complicate that problem to explore the literature on that problem, and then explain how well humans do at it naturally. For example, the Multiarmed Bandit problem, or the Explore-Exploit Dilemma is used to shed light on the phenomena that old people have few friends, but they are very, very close.

In fact, I would read this book just for the chapter on the Explore-Exploit Dilemma, just because I think its critical to thinking about life and how one ought to live.

Review: The Drunkard's Walk: How Randomness Rules Our Lives

The Drunkward's Walk is a good pop-statistics book. Unlike, say, Nate Silver's Signal/Noise book, this is actually popular statistics at its root. This would be a good reader for an AP statistics class. He explains things like probability, the origin of the normal curve (among others) and generally combines narrative, explanation, and good hypotheticals to take us from the Greek idealism of geometric shapes to the chaotic world we live in (where hurricanes are predicted using multifaceted models that are, in general, random).

He also (and this was boring for me, but probably super useful for everyone else) dips his foot in the well that is Daniel Kahneman's "Thinking, Fast and Slow." At least one chapter is based in the "look how stupid humans are" category of writing, which is really what we need every once in a while.

This is a good refresher and it tells you about the history of some of the most important ideas we have. For example, the concept of "Expected Value" was invented by Blaise Pascal. The idea essentially killed him, as it brought into existence (and was brought into existence by) Pascal's Wager, which turned his sinner's life into one of apparent piety that caused him to wither away.