Misbehaving (book) Misbehaving (book) Misbehaving: The Making of Behavioral Economics is a book by Richard Thaler, economist and professor at the University of Chicago's Booth School of Business. He won the Nobel Prize for economics in 2017. The book builds on Thaler's work as a Behavioral Economist in trying to present an alternate view point that humans bring along behavioral biases, are error prone, and are not always rational. This view point builds on his work from his previous book, Nudge published in 2008. Thaler ties this to the effect on markets, which are otherwise expected to be efficient. Thaler uses the
Nudge (book) they are influenced by their social interactions. The book describes two systems that characterize human thinking, which Sunstein and Thaler refer to as the "Reflective System" and the "Automatic System". These two systems are more thoroughly defined in Daniel Kahneman's book "Thinking, Fast and Slow". The Automatic System is "rapid and is or feels instinctive, and it does not involve what we usually associate with the word "thinking"". Instances of the Automatic System at work include smiling upon seeing a puppy, getting nervous while experiencing air turbulence, and ducking when a ball is thrown at you. The Reflective System is