Saturday, March 1, 2008

What I'm Reading

I just finished reading Tim Harford's The Logic of Life: The Rational Economics of an Irrational World. It was an enjoyable book. I liked it much the same way and for the same reasons that I enjoyed his previous book, The Undercover Economist. Specifically, I think Harford does a better job explaining the economics than many of the authors of popular books on economic topics. It is because he is both an economist and a teacher. He understands the topic; and he obviously has a talent for communicating his understanding to others.

The focus of his book is that "people respond to incentives". He spends his time recounting instances of what appear to be irrational behavior, then digging a bit deeper to reveal incentives in the situation that, upon further investigation, make the apparently irrational rational. What appealed to me about his approach was the fact that I often tell my students that economics is based on an assumption that people are rational. When students will try to challenge the assumption, I frequently tell them that the problem may rest with them. They may not understand the values and desires and concerns of the decision-makers well enough to see that the action was rational for them, given the incentives in place and the goals and objectives.

Additionally, I can recommend the "book club" that was run by Tyler Cowan over at Marginal Revolution. Because the "club" started Harford's book well before I did, I made it a point not to read the review and discussion for each chapter until I had done likewise. The guest bloggers and commenters at Marginal Revolution crowd brought some additional insights to my reading.

I look forward to hearing from any of you who also read this book.

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