Behavioral Economics

“There’s an old joke that if you laid every economist in history end to end, they still wouldn’t reach a conclusion.”

Ha! The main point in Gary Belsky and Thomas Gilovich’s book is found in its long title: Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the New Science of Behavioral Economics. The authors say, joking aside, we actually know a lot about money and markets, yet still make irrational decisions when it comes to money. Belsky and Gilovich write that by combining the disciplines of psychology and economics, we can understand how people make illogical choices when spending, investing or borrowing money. The book is written in an entertaining style — just the kind of writing that will help make solid financial advice less dry!

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