Predictably Irrational (Dan Ariely)

Predictably Irrational: The Hidden Forces That Shape Our Decisions (Dan Ariely)

The branch of social psychology that Kahneman and Tversky initiated is often called "behavioral economics", because so much of the research has focused on the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions. Research in this field has shown that most of the assumptions about the behavior of "rational agents", as the term is commonly defined in economic theory, are simply false. Human beings commonly behave in ways that systematically violate simple rules of probability and decision-theory.

Dan Ariely has become a bit of a superstar in the world of behavioral economics and cognitive psychology. This best-selling book from 2008 introduced the concept of cognitive biases to a much broader audience.

Ariely is working squarely within the tradition of Kahneman and Tversky, but his engaging social experiments extend the examples further into the domain of everyday decision-making.

See also his other books, The Upside of Irrationality: The Unexpected Benefits of Defying Logic, and his more recent work on moral psychology, The (Honest) Truth About Dishonesty: How We Lie to Everyone -- Especially Ourselves.