Richard Thaler ... stylishly recounts empirical findings that skewer hitherto sheltered economic beliefs.

By unraveling a series of real-world puzzles with philosophical and practical implications, Thaler illuminates some fairly abstruse ideas in an entertaining way.... The best minds in economics today, as Thaler's provocative book suggests, are trying to supplement [insights into markets and prices] with a broader understanding of what makes people tick.

Richard Thaler challenges the received economic wisdom by revealing many of the paradoxes that abound even in the most painstakingly constructed transactions. He presents literate, challenging, and often funny examples of such anomalies as why the winners at auctions are often the real losers - they pay too much and suffer the "winner's curse" - why gamblers bet on long shots at the end of a losing day, why shoppers will save on one appliance only to pass up the identical savings on another, and why sports fans who wouldn't pay more than $200 for a Super Bowl ticket wouldn't sell one they own for less than $400. He also demonstrates that markets do not always operate with the traplike efficiency we impute to them. Thaler argues that recognizing these sometimes topsy-turvy facts of economic behavior will compel economists, as well as those of us who live by their lights in our jobs and organizations, to adopt a more balanced view of human nature, one reflected in Adam Smith's professed belief that, despite our selfishness, there is something in our nature that prompts us to enjoy, even promote, the happiness of others.

Richard Thaler challenges the received economic wisdom by revealing many of the paradoxes that abound even in the most painstakingly constructed transactions. He presents literate, challenging, and often funny examples of such anomalies as why the winners at auctions are often the real losers--they pay too much and suffer the winner's curse--why gamblers bet on long shots at the end of a losing day, why shoppers will save on one appliance only to pass up the identical savings on another, and why sports fans who wouldn't pay more than $200 for a Super Bowl ticket wouldn't sell one they own for less than $400. He also demonstrates that markets do not always operate with the traplike efficiency we impute to them.

	Acknowledgments
1	Introduction	1
2	Cooperation	6
3	The Ultimatum Game	21
4	Interindustry Wage Differentials	36
5	The Winner's Curse	50
6	The Endowment Effect, Loss Aversion, and Status Quo Bias	63
7	Preference Reversals	79
8	Intertemporal Choice	92
9	Savings, Fungibility, and Mental Accounts	107
10	Pari-mutuel Betting Markets	122
11	Calendar Effects in the Stock Market	139
12	A Mean Reverting Walk Down Wall Street	151
13	Closed-End Mutual Funds	168
14	Foreign Exchange	182
15	Epilogue	197
	References	199
	Index	225