Review: The Logic of Life

The Logic of Life
The Logic of Life by Tim Harford
My rating: 4 of 5 stars

A grandiose title that tells you this book is a little more ambitious than “The Undercover Economist”. Harford writes with passion and urgency, defending rational choice theory as a useful framework for predicting in the majority of cases how the majority of people behave. Because people change their behaviours in response to incentives (and these include non-financial ones), rational choice theory also lends itself well to policymaking.

Someone needs to write about how those incentives can or should be structured, given findings in new branches of economics such as behavioural economics. Harford throws in a few comments about the applicability of some of Kahneman’s lab research to real world situations, and hints at “neuroeconomics”. Perhaps a follow-up is needed?

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