How to Think Like An Economist

by Roger A. Arnold

How To Think Like an Economist offers instructors a tool to both motivate students and get them to recognize how economics affects their everyday lives. In less than 200 pages, How to Think Like an Economist consists entirely of economics "stories" and real-world applications that the author has used in his class to help hundreds of students make the connection between economics and their lives.

Genres: Business, Economics

144 pages, Paperback

First published January 9, 2004

Reviews

[Luke Peterson · Rating 4 out of 5]

I really liked this book. It's not too special or anything, but it's a great collection of case studies that help fine-tune the economic eye of the reader. Definitely worthwhile if you ever interact with other people; this will give you some insight as to why folks make decisions, both individually and en masse.

[Dan · Rating 3 out of 5]

I picked this up wanting a book that would give me a non-economist’s guide to economics. I don’t think it’s designed for that, rather it’s intended as an aid in intro economics courses at university (and think it would be great at that). But was an enjoyable read and had some interesting insights.

[Jennifer Wicker · Rating 5 out of 5]

I loved this book it should be required reading in school. If it were, US politics and Americans collective personal debt would not be in such poor shape

[Thang Tran · Rating 4 out of 5]

I used excerpts from this book for my translation class. The author is a respected American economics professor, who explains the economic ideas and concerns (i.e. supply, demand, prices, college market, oil market, trades and transfers, interest groups, employer-employee relation, etc.) in down-to-earth methods, stories and examples. Some will surprise you, for example, is there a connection between SUVs and terrorism? Gas prices and questions the economist asks. Each Chapter has a summary section and questions to strengthen your comprehension, convenient for class discussions. I wish this book could have more illustrations, graphs, and tables.

[Tariq Mustafa]

Arnold describes a toolkit that could/should be used if the goal is to mimic professional economist and gather rewards from that view point. Square brackets [] are my thoughts/translations of the ideas of the author.

1. People respond to incentives. [Don't expect them to act because of innate goodness or badness of an idea. Bait is necessary to the lizard mind]

2. There is no free lunch. [Free things too aren't free because they hog up your ability to do something else. Say no often.]

3. Prices are compressed information. [Best take-away. Short on time on a subject issue/news? check prices of related items. But this is only true if everyone in the crowd is applying their brains, not following a news ticker!]

4. Future Trades are used as information gathering!

5. Every information has a counterpart ignorance. [If you know something about a product, an idea or a thing, you have an edge over someone who does not]

6. Marginal value. [Economic's favorite phrase. Don't worry for the absolute values or total sums. That's what naivees do. Work at the margin!]

7. Prisoners' Dilemma [Game theory boiler plate]

8. Tragedy of the Commons

9. Wisdom of Crowds. [Only works with everyone in the crowd thinks, not blindly follow]

10. Foolishness of the crowd is a result of 'availability cascade'.

11. Every transaction has two sides. Win/Win is a fallacy.

12. Information asymmetry causes all trades to happen. [Use it to your advantage]

13. The Blind Date Analogy

14. Information Manipulation and the incentives for the same

15. Risks are omni present. This is with life is all about.


Rating 7/10