For a long time, economists have assumed that we were cold, self-centred, rational decision makers â" so-called Homo economicus; the last few decades have shattered this view. The world we live in and the situations we face are of course rich and complex, revealing puzzling aspects of our behaviour. Optimally Irrational argues that our improved understanding of human behaviour shows that apparent 'biases' are good solutions to practical problems â" that many of the 'flaws' identified by behavioural economics are actually adaptive solutions. Page delivers an ambitious overview of the literature in behavioural economics and, through the exposition of these flaws and their meaning, presents a sort of unified theory of behaviouralism, cognitive psychology and evolutionary biology. He gathers theoretical and empirical evidence about the causes of behavioural 'biases' and proposes a big picture of what the discipline means for economics.
Industry Reviews
'What is behavioural economics and how has it affected the way economic research is conducted, used and perceived? Is behavioural economics defined by the questions it poses, the methods it employs, or by something else? How are economics' questions and methods affected by behavioural economics? Almost a century after the official divorce of economics from psychology, and some three decades into the behavioural revolution, Lionel Page offers a lucid and intelligent assessment of the state of the science. With a strong and enlightening focus on historical and philosophical perspectives, Optimally Irrational suggests evolutionary psychology as a guiding principle for organizing our knowledge, striking a balance between observation and theory, and helping us to tell apart insightful analysis from fanciful idealisation, as well as robust findings from anecdotal evidence.' Itzhak Gilboa, Professor of Economics and Decision Sciences, HEC Paris
'Rationality, central in economics and empirically abandoned in the 'behavioural revolution', is, unfortunately, rarely discussed because of its slippery nature. This monograph captures its essence, as well as that of behavioural economics. Nuanced and in-depth, it thus serves two methodological purposes - a fortunate combination because one cannot be understood well without the other.' Peter Wakker, Erasmus School of Economics, Erasmus University, Rotterdam
'The time has gone by when behavioural economists had to struggle to make any headway against the neoclassical orthodoxy that once held sway. Now the question is whether neoclassical economics can survive its replacement by behavioural economics as the new orthodoxy. But books have begun to be written which deny that any rivalry is necessary. They seek to meld the two approaches using the theory of evolution as a unifying tool. Neoclassical ideas are seen as being needed to study evolutionary processes in the style pioneered by evolutionary biologists. Behavioural economics is seen as being needed to study the outcomes of such processes in the style pioneered by evolutionary psychologists. Lionel Page's book is the best I know at expounding how this cross-fertilization of disciplines works - meaty in its choice of examples without going overboard on technical details. Future research will doubtless undermine some of the claims made from both sides of the fence, but one could not find a better source for studying the current state of play.' Ken Binmore, Emeritus Professor of Economics, University College London
'This book is an antidote to the generally pessimistic view that the field of behavioural economics has conveyed about human cognition and behaviour. Lionel Page builds a much richer understanding of the plethora of cognitive deficiencies and human misbehaviours reported in the literature. He approaches them with the mindset of someone who wonders whether they cannot be better understood as good solutions to the actual problems that humans face in real life. In the process, Page covers huge swaths of scientific territories (such as decision theory, game theory, social psychology, cognitive science). He provides very good intuitions through engaging examples and a discussion of past historical debates, in spite of the technically challenging nature of the material covered. This book is a must-read for any scientist interested in the irrational side of human behaviour. Beyond, it will be a great read to educated readers fond of behavioural economics.' Peter Bossaerts, Faculty of Economics, Cambridge University
'The human mind is an elaborate product of natural selection. Optimally Irrational is very welcome in bringing into focus the evolutionary underpinnings of human cognition as applied to economic decisions. Behavioural economics has often taken psychological mechanisms as arbitrary, without regard to the evolutionary design problems that created them. Such an atheoretical approach is questionable in view of the replication crisis in psychology. Page's deeper examination of behavioural economics is thoughtful and wide ranging. I learned much from this insightful and engaging book.' David Hirshleifer, Professor of Finance, University of California at Irvine
