Category: Books

Books Everyone Should Read on Psychology and Behavioral Economics

Psychology and Behavioral Economics Books

Earlier this year, a prominent friend of mine was tasked with coming up with a list of behavioral economics book recommendations for the military leaders of a G7 country and I was on the limited email list asking for input.

Yikes.

While I read a lot and I’ve offered up books to sports teams and fortune 100 management teams, I’ve never contributed to something as broad as educating a nation’s military leaders. While I have a huge behavorial economics reading list, this wasn’t where I started.

Not only did I want to contribute, but I wanted to choose books that these military leaders wouldn’t normally have come across in everyday life. Books they were unlikely to have read. Books that offered perspective.

Given that I couldn’t talk to them outright, I was really trying to answer the question ‘what would I like to communicate to military leaders through non-fiction books?’ There were no easy answers.

I needed to offer something timeless. Not so outside the box that they wouldn’t approach it, and not so hard to find that those purchasing the books would give up and move on to the next one on the list. And it can’t be so big they get intimidated by the commitment to read. On top of that, you need a book that starts strong because, in my experience of dealing with C-level executives, they stop paying attention after about 20 pages if it’s not relevant or challenging them in the right way.

In short there is no one-size-fits-all but to make the biggest impact you have to consider all of these factors.

While the justifications for why people chose the books below are confidential, I can tell you what books were on the final email that I saw. I left one book off the list, which I thought was a little too controversial to post.

These books have nothing to do with military per se, rather they deal with enduring concepts like ecology, intuition, game theory, strategy, biology, second order thinking, and behavioral psychology. In short these books would benefit most people who want to improve their ability to think, which is why I’m sharing them with you.

If you’re so inclined you can try to guess which ones I recommended in the comments. Read wisely.

In no order and with no attribution:

  1. Risk Savvy: How to Make Good Decisions by Gerd Gigerenzer
  2. The Righteous Mind: Why Good People Are Divided by Politics and Religion by Jonathan Haidt
  3. The Checklist Manifesto: How to Get Things Right by Atul Gawande
  4. The Darwin Economy: Liberty, Competition, and the Common Good by Robert H. Frank
  5. David and Goliath: Underdogs, Misfits, and the Art of Battling Giants by Malcolm Gladwell
  6. Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions by Dan Ariely
  7. Thinking, Fast and Slow by Daniel Kahneman
  8. The Folly of Fools: The Logic of Deceit and Self-Deception in Human Life by Robert Trivers
  9. The Hour Between Dog and Wolf: Risk Taking, Gut Feelings and the Biology of Boom and Bust by John Coates
  10. Adapt: Why Success Always Starts with Failure by Tim Harford
  11. The Lessons of History by Will & Ariel Durant
  12. Poor Charlie’s Almanack
  13. Passions Within Reason: The Strategic Role of the Emotions by Robert H. Frank
  14. The Signal and the Noise: Why So Many Predictions Fail–but Some Don’t by Nate Silver
  15. Sex at Dawn: How We Mate, Why We Stray, and What It Means for Modern Relationships by Christopher Ryan & Cacilda Jetha
  16. The Red Queen: Sex and the Evolution of Human Nature by Matt Ridley
  17. Introducing Evolutionary Psychology by Dylan Evans & Oscar Zarate
  18. Filters Against Folly: How To Survive Despite Economists, Ecologists, and the Merely Eloquent by Garrett Hardin
  19. Games of Strategy (Fourth Edition) by Avinash Dixit, Susan Skeath & David H. Reiley, Jr.
  20. The Theory of Political Coalitions by William H. Riker
  21. The Evolution of War and its Cognitive Foundations (PDF) by John Tooby & Leda Cosmides.
  22. Fight the Power: Lanchester’s Laws of Combat in Human Evolution by Dominic D.P. Johnson & Niall J. MacKay.

Rory Sutherland Offers 4 Interesting Reads

Rory Sutherland

I asked Rory Sutherland (Vice Chairman: Ogilvy & Mather) what books stood out for him last year. I’ve had the privilege of chatting with Rory a few times now and I think you’ll agree, like most farnamstreeters not only is he exceptionally smart but he’s an awesome person.

I think you’ll enjoy his reply:

Gerd Gigerenzer’s Risk Savvy: How to Make Good Decisions is a wonderful book; the concept of defensive decision-making which he describes within it is alone worth the cover price. As an additional bonus, you get a very valuable lesson in the interpretation of statistics, a field of mathematics which – I think it is now almost universally agreed – is given too little time and attention in schools.

Pathological Altruism, edited by Barbara Oakley et al, is a wonderfully broad book – but built around a single insight. That, just as apparently self-interested acts can have benign consequences, the reverse is also true. We tend to think that altruism is something to be maximised – but in fact it needs to be calibrated. A very important book.

Peter Thiel’s Zero to One: Notes on Startups, or How to Build the Future is an excellent book from someone who seems to understand what Fitzgerald called “the whole equation” of a business: in this case it isn’t movies but technology. A very enjoyable book of just the right length.

Finally I immensely enjoyed the manuscript of Richard Thaler’s upcoming book Misbehaving: The Making of Behavioral Economics. I have not laughed so much in ages as when reading his chapter describing how the Economics Faculty of the University of Chicago tried to agree on the allocation of offices in their new building. No, it did not go well.

Wall Street’s Must-Read Books of the Summer

What's wall street reading this summer?

Bloomberg asked a few prominent wall-street types what books were on their reading list. Participants were asked to give one recent book as well as an all time favorite. Never ones to follow the rules, some people have three recommendations.

What strikes me the most is what’s not on these lists. You won’t find The Three Marriages, Marcus Aurelius’ Meditations, or any philosophy for that matter. You won’t find any good books on meditation, stillness, or why managing your energy, not time, is the key to high performance. And you also won’t find books about happiness or meaning.

Stephen King says it better than I ever could:

Back in the days when I was an EW regular, I started a column titled ”25 Things That Piss Me Off.” I never finished, because I’m a fairly easygoing guy and I could only think of about a dozen. But on that abbreviated list, right between No. 7 (”When the Junior Mints fall off my toothpick”) and No. 9 (”People who think movies with subtitles are always works of genius”) was this, at No. 8: ”Snobby summer reading lists.” I’m talking about the guy who says he’s going to spend July rereading War and Peace or the woman who insists she’s finally going to dig into the complete works of George Eliot.

Really? Eliot or James Joyce while swinging in the backyard hammock? Maybe somebody thinks that’s the way to spend those lazy, hazy, crazy days of summer, but not me. … None of these novels will insult your intelligence, but all will take you away to new and interesting places full of excitement, danger, and maybe a few laughs. For me, that — and not A Complete History of Canada in Very Tiny Print — is what summer reading is all about.

Nevertheless there are some gems below.

Bill Ackman

Lloyd Blankfein

Jim Chanos

Mohamed El-Erian

Austan Goolsbee

Bill Gross

Sallie Krawcheck

Pablo Salame

Steve Schwarzman

Whitney Tilson

Take a minute and compare the list to the books recommended by the 2014 Re:Think Decision Making workshop or Bill Gates or Tyler Cowen.

The Books That Influenced Stephen Jay Gould

Stephen Jay Gould
Stephen Jay Gould was one of the most influential and widely-read writers of popular science of his generation, but you’d never know it from the short reply he gave when asked which books influenced him the most. He left the why part out.

As found in The Harvard Guide to Influential Books: 113 Distinguished Harvard Professors Discuss the Books That Have Helped to Shape Their Thinking:

As a kid growing up in New York City, I played stickball and poker instead of doing a lot of reading. I wasn’t a nonreader — I read at an average age and an average rate. The passion for reading came later in college.

The Origin of Species by Charles Darwin
The Meaning of Evolution by George G. Simpson
Lucky to be a Yankee by Joe Di Maggio
Daniel Deronda by George Eliot
The Bible. King James version

Follow your curiosity, for more in this series check out the books that influenced E. O. Wilson, B. F. Skinner, Thomas C. Shelling, Michael J. Sandel, and Jerome Kagan

(image source: nyt)

The Seven Books Bill Gates Thinks You Should Read This Summer

Bill gates
Bill Gates is out with his annual summer reading list and, while longer than last year’s, it’s a great place to kick off your summer reading.

“Each of these books,” Gates writes, “made me think or laugh or, in some cases, do both. I hope you find something to your liking here.”

Hyperbole and a Half, by Allie Brosh.

The book, based on Brosh’s wildly popular website, consists of brief vignettes and comic drawings about her young life. The adventures she recounts are mostly inside her head, where we hear and see the kind of inner thoughts most of us are too timid to let out in public. You will rip through it in three hours, tops. But you’ll wish it went on longer, because it’s funny and smart as hell. I must have interrupted Melinda a dozen times to read to her passages that made me laugh out loud.

The Magic of Reality, by Richard Dawkins.

Dawkins, an evolutionary biologist at Oxford, has a gift for making science enjoyable. This book is as accessible as the TV series Cosmos is for younger audiences—and as relevant for older audiences. It’s an engaging, well-illustrated science textbook offering compelling answers to big questions, like “how did the universe form?” and “what causes earthquakes?” It’s also a plea for readers of all ages to approach mysteries with rigor and curiosity. Dawkins’s antagonistic (and, to me, overzealous) view of religion has earned him a lot of angry critics, but I consider him to be one of the great scientific writer/explainers of all time.

What If?, by Randall Munroe.

The subtitle of the book is “Serious Scientific Answers to Absurd Hypothetical Questions,” and that’s exactly what it is. People write Munroe with questions that range over all fields of science: physics, chemistry, biology. Questions like, “From what height would you need to drop a steak for it to be cooked when it hit the ground?” (The answer, it turns out, is “high enough that it would disintegrate before it hit the ground.”) Munroe’s explanations are funny, but the science underpinning his answers is very accurate. It’s an entertaining read, and you’ll also learn a bit about things like ballistics, DNA, the oceans, the atmosphere, and lightning along the way.

XKCD, by Randall Munroe.

A collection of posts from Munroe’s blog XKCD, which is made up of cartoons he draws making fun of things—mostly scientists and computers, but lots of other things too. There’s one about scientists holding a press conference to reveal their discovery that life is arsenic-based. They research press conferences and find out that sometimes it’s good to serve food that’s related to the subject of the conference. The last panel is all the reporters dead on the floor because they ate arsenic. It’s that kind of humor, which not everybody loves, but I do.

On Immunity, by Eula Biss.

When I stumbled across this book on the Internet, I thought it might be a worthwhile read. I had no idea what a pleasure reading it would be. Biss, an essayist and university lecturer, examines what lies behind people’s fears of vaccinating their children. Like many of us, she concludes that vaccines are safe, effective, and almost miraculous tools for protecting children against needless suffering. But she is not out to demonize anyone who holds opposing views. This is a thoughtful and beautifully written book about a very important topic.

How to Lie With Statistics, by Darrell Huff.

I picked up this short, easy-to-read book after seeing it on a Wall Street Journal list of good books for investors. I enjoyed it so much that it was one of a handful of books I recommended to everyone at TED this year. It was first published in 1954, but aside from a few anachronistic examples (it has been a long time since bread cost 5 cents a loaf in the United States), it doesn’t feel dated. One chapter shows you how visuals can be used to exaggerate trends and give distorted comparisons—a timely reminder, given how often infographics show up in your Facebook and Twitter feeds these days. A useful introduction to the use of statistics, and a helpful refresher for anyone who is already well versed in it.

Should We Eat Meat?, by Vaclav Smil.

The richer the world gets, the more meat it eats. And the more meat it eats, the bigger the threat to the planet. How do we square this circle? Vaclav Smil takes his usual clear-eyed view of the whole landscape, from meat’s role in human evolution to hard questions about animal cruelty. While it would be great if people wanted to eat less meat, I don’t think we can expect large numbers of people to make drastic reductions. I’m betting on innovation, including higher agricultural productivity and the development of meat substitutes, to help the world meet its need for meat. A timely book, though probably the least beach-friendly one on this list.

Here is the video gates showed explaining the reads:

The Books That Influenced Jerome Kagan

Professor Emeritus of Psychology. Dr. Jerome Kagan wrote "The Temperamental Thread: How Genes, Culture, Time, and Luck Make Us Who We Are,"

Before Jerome Kagan was listed as the 22nd most eminent psychologist of the 20th century, just above Carl Jung, he was a professor of psychology at Harvard’s Graduate School of Arts and Sciences.

He was asked to be included in The Harvard Guide to Influential Books: 113 Distinguished Harvard Professors Discuss the Books That Have Helped to Shape Their Thinking, and now we know which books influenced him and why. His list is one of the longest and most comprehensive in the entire book.

In the preface to the list, he writes, “these books should generate a tolerance for others and appreciation of the power of historical contexts to create our deepest assumptions about human nature.”

History, Man, and Reason: A Study in Nineteenth-Century Thought by Maurice H. Mandelbaum

Mandelbaum’s analysis of the relation between the European conception of human nature and historical events in the eighteenth and nineteenth centuries helped me to understand why American intellectuals, and especially twentieth-century social scientists, were so strongly committed, until recently, to a belief in the power of the environment and the malleability of human characteristics, as well as resistant to all sentimental arguments that did not rest firmly on reason. The basis for our idealistic view of perfectible children, sculpted by education in home and school to make rationally based moral decisions in times of conflict, becomes an almost inevitable outcome of the blend of egalitarianism, evolutionism, and material science that has dominated thought since the eighteenth century.

After Virtue: A Study in Moral Theory by Alasdair C. Maclntyre

After Virtue extends Mandelbaum’s conclusions to the domain of ethics by arguing that historical conditions determine many of the moral premises of a society. Maclntyre points out, for example, that our acceptance of the naturalness of individual rights is not a universal, for there is no word or phrase in ancient or medieval languages that refers to an individual’s right to a particular resource. This assumption is not made until the close of the Middle Ages. I learned from Maclntyre that a society’s views of right and wrong are fragmented survivals of a series of economic and political events that lead the community to treat social facts as moral imperatives. Thus, the role of history is a common theme that unites the books by Maclntyre and Mandelbaum.

The Eternal Smile by Par Lagerqvist

A single sentence in this story by a Swedish novelist captures the idea that Maclntyre was trying to develop. After an interminably long search, a large group of dead people find God and the leader steps forward and asks him what purpose he had in creating human beings. God replies, “I only intended that you need never be content with nothing.” After reading that line I saw the meaning of the tree-of-knowledge allegory in Genesis. Human beings are prepared by their nature to believe that there are right and wrong acts, but history and the nature of the society in which persons live will determine more exactly those categories of intention and action that will be treated as moral or immoral.

The Growth of Biological Thought by Ernst E. Mayr

Mayr’s history of biological thought over the past few centuries helped me see more clearly the relation between categories in biology and those in psychological development. Mayr notes that biology, unlike physics, deals more often with qualitative categories, rather than continua. Thus, biology is a unique science that is not easily reduced to physical concepts. Mayr understands that in biology the most useful categories are those that have been inductively derived from phenomena, rather than posited a priori. I believe that modern psychology is in a phase of development in which it can benefit from the inductive strategy that eighteenth- and nineteenth-century biologists used with such profit. Such a frame is present in Darwin’s great insight that evolution should not be viewed as a series of variations on a set of ideal types, but rather as a series of transformations on ancestors.

Never in Anger Jean L. Brigg

The central message in this ethnography of the Eskimo of Hudson Bay is that despite the fact that this culture is characterized by a continual suppression of anger and aggression, none of the systems that are typically associated with denial of anger in Western society occurs among the Eskimo. Thus, this culture provides a refutation of the Freudian hypothesis that repression of anger must lead to symptomatology. The obvious implication is that the validity of the psychoanalytic hypothesis is restricted to certain cultures. It follows, then, that there are no universal outcomes of either the suppression or expression of anger, independent of the social context.

The Neural Crest by Nicole LeDouarain

This monograph by a distinguished neuroembryologist describes the growth and transformation of the cells that begin as a small necklace around the embryo’s spinal column and migrate to their final homes in the central nervous system of the newborn. The main point is that although all the cells are alike originally, they become transformed over their journey into structures that cannot be changed. The different transformations each type of cell undergoes is a function, in part, of the cells that are encountered on the way. This story of the migration of the neural crest cells furnishes a useful metaphor for the psychological growth of a human being, who is also transformed through the contacts he or she has in the life journey.

Summing up, before continuing with one final recommendation, he writes:

A salient theme in the six books noted above is that absolutes are hard to find in nature; most laws are constrained by particular contexts. But there must be a small number of universal relations that trace their way back to biology. The final book supplies one of these mechanisms.

And last,

Sensory Inhibition by Georg Von Bekesy

This book, which I read as a young psychologist, is the one exception to the relativism contained in the first six volumes. One basic biological mechanism is that brain and mind are constructed to maximize contrasts and to improve the signal-to- noise ratio. The mind rebels against the ambiguity and relativity in nature and tries to create simple, prototypical conceptions. If one idea is a little more salient than another, the mind tends to exaggerate the former and minimize the latter. Hence, there is a biological basis for our attraction to stereotype and to single ideas that mute the gradations that are inherent in nature. As a result, we are seduced into believing in absolutes, when nature contains only families of relations among events.

Follow your curiosity, for more in this series check out the books that influenced E. O. Wilson, B. F. Skinner, Thomas C. Shelling, and Michael J. Sandel.

(image source)