Michael Mauboussin’s Behavioral Economics Reading List

Michael Mauboussin is one of the smartest people you’ll ever meet. Need proof? Just listen to this podcast interview we did.

If you’re looking to learn about behavioral economics, he recommends you start with the following books and articles.


1. Thinking, Fast and Slow by Daniel Kahneman
Comment: A sweeping review of the work of the greatest psychologist of the past half-century.

2. Judgment in Managerial Decision Making — Seventh Edition by Max H. Bazerman
Comment: A great source for heuristics and biases

3. Expert Political Judgment by Philip Tetlock
Comment: Are you still listening to expert prognosticators? A devastating, empirical study of how bad expert predictions are in complex realms.

4. The Halo Effect by Phil Rosenzweig
Comment: Lots of lessons in 175 pages–you’ll never look at the world the same way after reading this one.

5. The Winner’s Curse by Richard Thaler
Comment: The contents are the foundation of what we call behavioral finance.

Recommended Articles

1. On the Psychology of Prediction by Daniel Kahneman and Amos Tversky (Psychological Review, Vol. 80, No. 4, July 1973, 237-251)
Comment: Kahneman said this was his favorite paper. This explains the inside-outside view.

2. Prospect Theory: An Analysis of Decision Under Risk by Daniel Kahneman and Amos Tversky (Econometrica, Vol. 72, No. 2, March 1979, 263-292)
Comment: A clear and compelling discussion of how behavior varies from what utility theory predicts.

3. A Survey of Behavioral Finance by Nicholas C. Barberis and Richard H. Thaler (in George Constantinides, Milton Harris, and Rene Stulz, eds.Handbook of Economics of Finance: Volume 1B, Financial Markets and Asset Pricing, Elsevier North Holland, Chapter 18, 1053-1128)
Comment: Exactly as advertised–what you need to know about behavioral finance in one place.

4. Conditions for Intuitive Expertise: A Failure to Disagree by Daniel Kahneman and Gary Klein (American Psychologist, Vol. 64, No. 6, September 2009, 515-536)
Comment: We overestimate the abilities of experts. But they do work in certain settings. This explains when you can trust an expert.

5. Hindsight ≠ Foresight: The Effect of Outcome Knowledge on Judgment Under Uncertainty by Baruch Fischhoff (Journal of Experimental Psychology: Human Perception and Performance, Vol. 1, No. 3, August 1975, 288-299)
Comment: Hindsight bias and creeping determinism. Big problems.

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The Ultimate Behavioral Economics Reading List