Monday, December 17, 2018

Book Review: The Undoing Project: A Friendship that Changed Our Minds by Michael Lewis, narrated by Dennis Boutsikaris (audio)

Michael Lewis is the master of explaining complicated economic and financial issues and concepts, and lately I've discovered I like his books even better on audio. My father is an economist so I've always known a bit. I even took a couple of classes in college. Only after college did I discover behavioral economics (through Michael Lewis!), which I find so much more accessible and interesting. And this book is about Daniel Kahneman and Amos Tversky, the Israeli psychologists who came up with behavioral economics.

It's unusual that psychologists came up with the first new sub-field of economics in the last century. But economists since the beginning of the field have posited the curious base notion that people make rational decisions and therefore X will equal Y when you do Z. And then it doesn't happen that way. But economists rarely changed their theory. They certainly never changed their theory about "rational decisions." They ignored blatantly bizarre-seeming consumer behavior. Such as when extremely poor families get a small windfall, why they don't use it to pay off debt or fully stock their pantries, but instead often use it for a purchase like a big-screen TV. They shouldn't do that according to economists, and yet they do.

Kahneman and Tversky came at this from psychology, from looking at people and why they do the things they do. The fact that their research eventually intersected with economics was, to them, a coincidence. They never set out to have anything to do with that field. Opposites in nature, their ways of thinking and approaching subjects worked in sync with each other to the point that neither was able to have much success alone. Initially Tversky was the more famous, however since he died before their work was awarded the Nobel (and the Nobel is not awarded posthumously), Kahneman, who often felt outshone by Tversky, has come out ahead in recent years.

This book is about friendship and partnership and how sometimes one plus one equals far more than two. And how sometimes a relationship like that can burn out. Even among brilliant academics, sometimes there are hurt feelings and relationships that flounder. It's like that Us Weekly feature: "Nobel-Prize Winners: they're just like us! Here is Daniel Kahneman pumping his own gas and nursing hurt feelings." This is a fascinating dual-biography of two men who likely never could have come up with their theories individually, but together, created a whole new branch of academia, which can finally explain our seeming irrationality.

I downloaded this eaudiobook from the library via Overdrive.

No comments: