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?
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
- − 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?
The most relevant excerpts across the subreddits where this book is mentioned — opinionated, argued takes first, then top-upvoted mentions. 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 …
“There's a list of books in the sidebar. The Simple Path to Wealth by JL Collins is my go-to recommendation. That's a good starting point/one-stop shop, but there are plenty of other books that are good - *Misbehaving* by Thaler on behavio…
“You might be interested in "Misbehaving" by Richard Thaler. It's an interesting book about behavioral economics that talks about this sort of thing.
“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…
“Recommendations for interesting books about economics? The WIKI mostly has books about investment, which isn't what I am looking for. I just requested Thaler's Misbehaving from the library. I've read Freakonomics. Any other recommendations?
Convinced? Pick up Misbehaving
What else does r/financialindependence read?
Other books mentioned in the same sub, ranked. Shared-sub overlap with this title breaks ties.
Misbehaving — frequently asked
What does Reddit actually say about Misbehaving?+
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.