The Logic of Life: The Rational Economics of an Irrational World

AuthorGilles Bauche
PositionAdvisor - IMF External Relations Department
Pages54

Page 54

Random House, New York, 2008, 272 pp., $25 (cloth).

Dear Economist, I feel overwhelmed by the current plethora of books on the "new economics of everything." Having read Tim Harford's previous book, The Undercover economist, as well as The Tipping Point, Blink, The Wisdom of Crowds, and, of course, Freakonomics, would I be well advised to read The Logic of Life: The rational economics of an Irrational World, or should I stick with my economics textbooks? And, for that matter, how do you explain that so many books of this kind are being written?

Signed: Lost in Pop Economics

Dear Lost in Pop economics,

Yes, The Logic of Life is well worth a read.

First, in what other book could the rational choice assumption be taken for such a wild ride across matters of marriage and divorce, obesity, gambling, addiction, your boss-yes, all the things that really matter in life? And what other recent economic research provides titillating explanations for, among other things, the dynamics of urban population shifts, the origins of the Industrial revolution, and how our homo sapiens ancestors may have driven the Neanderthals to extinction?

Second, where else could you find rational explanations for why CeOs are overpaid (hint: it's not because "they're worth it"), or why Sex and the City's Carrie Bradshaw laments the lack of men in Manhattan yet does not relocate to, say, Anchorage, Alaska. If harford's explanation that "plenty of women seem to have decided they would rather compete for scarce wealthy males than move where the males are poorer but more plentiful" sounds too politically incorrect, try thinking about evolutionary biology, according to which powerful men can protect a family better and younger women can produce more offspring.

Third, where else could you be introduced to such a cast of remarkable characters who confirm that reality can be stranger than fiction, from Chris "Jesus" Ferguson, computer geek turned poker champion who won more World Series of Poker events from 2000 and 2004 than any rivals in a decade applying John von Neumann's poker model (warning: don't try this in Las Vegas), to Nobel laureate Thomas Schelling, who used game theory to save the world from a nuclear war and quit smoking (the latter being more difficult than the former, as any smoker could tell you).

And so, after The Undercover Economist, Tim harford is at it again, taking us on a tour of cutting-edge research from a "new breed of economists," to...

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