Optimally Irrational: The Hidden Benefits of Bad Instincts provides economists, social scientists and researchers in behavioral economics with a clear view of the frontier of research in economics and other behavioral sciences, including how the different biases unveiled by behavioral economics make sense when we try to optimize problems. The book evaluates the role of bias in human economic behavior, considers the human decision-making processes as the product of natural selection, and explores why we behave the way we do.
- Discusses how we think about, and adopt, apparently irrational behaviors and biases in empirical research
- Explains how biases may be adaptive solutions to well-posed optimization problems under constraints
- Unites advances in behavioral economics with those from other behavioral sciences and evolutionary biology
I Setting the scene 1. The homo economicus model 2. The psychology of biases in human behaviour 3. The logic of a scientific revolution in economics 4. Evolution and the logic of optimisation
II Individual decisions 5. Heuristics and biases 6. Reference dependent preferences 7. Sensitivity to probability 8. Random utility 9. Time preferences
III Strategic interactions 10. Kindness and reciprocity 11. Emotions and commitment 12. Trust and reputation 13. Selection of delusion
Lionel Page is the head of the Queensland Behavioural Economics group at QUT. He received the 2016 Young Economist Award from the Economic Society of Australia as an economist under 40 who has made a significant contribution to economic thought. He is a previous recipient of an Australian Research Council Award and a Queensland Smart Future Fellowship. His research has attracted substantial media attention both in Australia and overseas, including coverage by the Financial Times, Wall Street Journal, New York Times, and The Australian. He is associate editor of two international economic journals, Theory and Decision and Behavioral Public Policy.