2008 was a very interesting and important year for Behavioral Economics.
For many years, the common reaction to the experimental evidence showing different types of irrationality was that these irrationalities will “go away” when dealing with professional people, dealing with a lot of money, and of course acting within the competitive environment of the market.
While I never understood the intensity of beliefs in these arguments, it was not really possible to test these assertions — so this remained an academic debate.
In 2008 when the markets failed is such a miserable way, it became clear that rationality was not just playing a role in “regular” peoples’ lives, and that it was also a part of professional sector and our institutions. Now irrationality became much more interesting to the general audience, business, and even policy makers.
Predictably Irrational was first published in February 2008, and given the relative ease of modifying books these days, I decided to add some of my reflections on the stock market crisis — and create an expanded edition of Predictably Irrational. Once I decided to add some material, I also realized that I have learned some new things in the last two years about some of the original chapters in Predictably Irrational, so I added some material about these topics as well.
The expanded edition will come out on May 19th, with a somewhat different cover (see below), more material, and also with a more aggressive stand against rational economics.
I am looking forward to the reactions to this version, and in particular to the criticisms from rational economists.