Book review: Behavioural economics and finance

"Behavioural Economics and Finance. Michelle Baddeley. Routledge. 2013. --- Standard models in economics usually assume that people are rational, self-interested maximisers, effectively co-ordinated via the invisible hand of the price mechanism. Whilst these approaches produce tractable, simple models, they cannot fully capture the uncertainties and instabilities that affect our everyday choices. Behavioural Economics and Finance brings economics and finance together with psychology, neuroscience and sociology, aiming to introduce the reader to some of the key concepts and insights from this rich, inter-disciplinary approach to real-world decision-making. Reviewed by Anna Grodecka.