Book · 2015
Misbehaving
by Richard H. Thaler
Richard Thaler's account of how behavioral economics got built, from the anomalies that standard theory couldn't explain to a Nobel Prize.
What does Reddit think of Misbehaving?
Three mentions across 7 years, split between r/Bogleheads (2) and r/investing (1), and what those threads chose to highlight is telling. r/Bogleheads used Misbehaving to explain why employees won't sell company stock they'd never buy — the endowment effect in its most stubborn form, illustrated with Thaler's own framing. A separate Bogleheads comment (↑22) reaches for the book to critique the 3-factor and 5-factor models directly, arguing Thaler treats them as defensive retrofits rather than genuine theory. Over in r/investing (↑15), it sits on a three-book starter list beside Malkiel and Housel — company that signals how readers place it: foundational psychology of money, not pop-science curiosity. The sample is small enough that no clear consensus forms. What the data does show is that when Misbehaving gets cited, it's doing explanatory work — readers pull it out to account for behavior that efficient-market models refuse to touch.
Community feedback & reader fit
Themes
- · behavioral economics
- · cognitive biases in investing
- · endowment effect
- · market efficiency critique
- · factor model skepticism
- · personal finance psychology
Common praise
- + The endowment-effect framing explains why employees hold company stock they'd never voluntarily buy — r/Bogleheads readers flag this as immediately applicable.
- + The chapter on factor models gives Bogleheads a concrete critique of the 3-factor and 5-factor frameworks as theory-patching rather than genuine insight.
- + r/investing recommends it alongside Malkiel and Housel, which places it in the short list of books that actually change how people think about financial decisions.
Common criticism
- − Only 3 mentions across 7 years suggests the book doesn't generate the kind of repeat discussion that keeps a title alive in investing communities.
- − No commenter engages with the book's limits or failures — the sample is too thin to surface any real pushback.
Who it's for
You already know the efficient-market hypothesis and you want a book that explains why it keeps failing in practice. If you've watched yourself or colleagues hold onto losing positions for reasons you can't quite articulate, Thaler names those reasons. r/investing groups it with A Random Walk Down Wall Street and The Psychology of Money as foundational reading — meaning it works best once you have the standard framework to argue against. Pure beginners may find the academic history sections slow.
Mentions over time
Top subreddits
Which Reddit comments matter for Misbehaving?
Top-upvoted quotes across the subreddits where this book is mentioned. Click through to read the full thread.
“You may be interested in Richard Thaler's book called Misbehaving. People hold to their company stock for behavioral reasons (due to psychological biases). They will freely admit that they will not put new money into company stock. But anything that was awarded to them is sacrosanct. I suspect …
“Read more. Seriously, dig into personal finance, investing, and psychology. Understand what motivates us into making bad financial and investing decisions. I think three good places to start are: * Burton G. Malkiel - A Random Walk Down Wall Street * Morgan Housel - The Psychology of Money * Rich…
Convinced? Pick up Misbehaving
What else does r/Bogleheads read?
Other books mentioned in the same sub, ranked. Shared-sub overlap with this title breaks ties.
The Simple Path to Wealth
JL Collins
A retired fund manager distills 40 years of index investing into one rule: buy VTSAX, ignore the noise, and wait.
The Little Book of Common Sense Investing
John C. Bogle
John Bogle's case for index funds in 200 pages: own the whole market, pay almost nothing, and wait — cited 262 times on Reddit and counting.
The Psychology of Money
Morgan Housel
Morgan Housel paid off a 3% mortgage early and calls it his best money decision ever — 209 Reddit mentions say the paradox is the whole point.
The Bogleheads' Guide to Investing
Taylor Larimore
The index-fund bible that turns 136 Reddit mentions into one repeatable answer: buy, hold, ignore the noise.
A Random Walk Down Wall Street
Burton G. Malkiel
Burton Malkiel's 50-year argument that you can't beat the market, backed by data, and Reddit's most-cited reason to stop stock-picking.
The Millionaire Next Door
Thomas J. Stanley
A 1996 study of 1,000 American millionaires found they drove used cars, lived in modest houses, and got rich by spending less than they earned.
Misbehaving — frequently asked
What does Reddit actually say about Misbehaving?+
The sample is small — 3 mentions across r/Bogleheads and r/investing over 7 years. Both Bogleheads threads use it to make a specific point: one about endowment-effect behavior in company stock, one about factor models as a retreat from market efficiency. That's a narrow slice, but every citation is substantive rather than passing.
Is Misbehaving worth reading if I've already read The Psychology of Money?+
Yes, but they do different work. r/investing groups them on the same starter list, which implies overlap, but Thaler's book is more academic in structure — it traces how behavioral economics was built and where standard theory broke. Housel is anecdote and wisdom; Thaler is argument and evidence.
Does Misbehaving say anything useful about index investing or factor models?+
Depends on what you want from it. The Bogleheads comment (↑22) says Thaler frames the 3-factor and 5-factor models as attempts to preserve market efficiency against contradicting data. That's a pointed read. Whether you find it useful or irritating probably tracks how committed you already are to factor investing.
Should I read Misbehaving before or after A Random Walk Down Wall Street?+
After. r/investing recommends Malkiel first, and the logic holds — Misbehaving spends a lot of energy arguing against the efficient-market framework, which lands harder once you've internalized what that framework actually claims. Reading Thaler cold means missing half the targets he's shooting at.