Predictably Irrational

Economists usually assume that people are rational. This has a very specific formal meaning, but it basically means that people know exactly what they want, know everything there is to know about their options, and make choices in a way that maximizes their own happiness - whatever this may mean. People are assumed to be selfish and very good at computing and pondering their options. This framework can capture human behavior in some situations, but as everybody knows (including economists) is just far from what happens in the real world...most of the time. People deviate from rationality, but fortunately tend to do so in a systematic way (of course, we know that we make the same "mistakes" over and over...). Finding and modeling deviations from rationality is the business of behavioral economists (such as these).

In "Predictably Irrational" Dan Ariely explains how we deviate from rationality, and how it may be useful to somehow be aware of such deviations. Useful for us, in life, and useful for economists (and social scientists in general)! The book has 13 chapters, and explains how we fail to estimate pain, how context changes our decisions, why we like free things beyond reason, and how we may or may not adhere to social norms. How emotions mess up with our decisions, why we all love procrastination, and why we all cheat sometimes are also very appealing parts of the story. Experiments with human subjects are described nicely and intuitively, just like a story. The whole thing reads pretty fast, which I see as a plus here. If you want academic rigor or are too fastidious with written-like-prose science, then you can always go get the paper - all the references are there. It is a good book, good popular science, which is hard to achieve.

Here's Ariely's TED talks (1 and 2)....