01 / Reading Guide
Reading Guide
Who this book is for
For undergraduates studying behavioural economics who want a sustained critical argument to read alongside its principal theories. Levine’s position is one contribution to a debate, not an impartial consensus statement. It is particularly useful when a striking demonstration of bias is being used to justify a much broader claim about economic behaviour.
Prerequisites
Introductory microeconomics, probability and the basic language of experimental research are helpful. Familiarity with strategic interaction makes some examples easier. The book is accessible without graduate economic theory, but readers should be ready to examine a model’s predictions rather than accept or reject it because of a memorable anecdote.
What it covers
The chapters examine where economic theory works or fails, apparent irrationality, beliefs, biases, decisions over time and uncertainty, learning, and connections with psychology and neuroscience. Laboratory evidence and ordinary economic activity are compared. The central methodological question is how a theory performs across contexts and whether an added psychological explanation improves its predictions.
How to use it
Choose one example and write the competing predictions before reading the author’s verdict. Separate the observed result from the auxiliary assumptions needed to explain it. Ask how the task, incentives, information and opportunities for learning affect the interpretation. Find a later study that challenges or supports the argument, then state the narrow conclusion that survives the comparison. Avoid treating either a laboratory anomaly or an everyday success as a universal test of a whole discipline.
Edition and sources
The publisher’s full book was released September 17, 2012; PDF ISBN 9781906924942, CC BY-SA 3.0. Read its claims in their historical research context and supplement the evidence with subsequent work.
