For those new to the subject, or with a burgeoning interest, below is some essential reading:
- Influence: The Psychology of Persuasion, Robert Cialdini 1984. The pre-eminent work on how we are influenced and how we can influence others.
- Irrational Exuberance, Robert Shiller 2000. Railing against the efficient market hypothesis, Shiller’s renowned work details how investor / crowd psychology can lead asset prices to deviate materially from fair value.
- Behavioural Investing, James Montier 2007. Now at GMO, Montier was one of the first to shine a light, directly, on the behavioural limitations of those working in the investment industry.
- Predictably Irrational, Dan Ariely 2008. Ariely is a master at utilising robust research to highlight and address our everyday behavioural foibles.
- Thinking, Fast and Slow, Daniel Kahneman 2011. If you have read one book in this broad field, this is probably it. The Nobel Prize winner is certainly essential reading, but don’t take it as gospel.
- Risk Savvy, Gerd Gigerenzer 2013 . Perhaps underappreciated outside the world of academia, Gigerenzer is excellent on our limitations when thinking about risk and the effectiveness of certain heuristics. Also Kahneman’s most vocal critic.
- Misbehaving. The Making of Behavioural Economics, Richard Thaler 2015. One of the founding fathers of behavioural economics details the history of the discipline and offers a superior introduction to many key topics.