The Legal Theory Bookworm recommends The Price of Happiness: Behavioral Economics and Willingness to Pay by Cass R. Sunstein. Here is a description:
People often ‘miswant.’ They buy goods that do not make them happy and refuse to buy goods that would make their lives better. In The Price of Happiness, Cass R. Sunstein focuses on people’s ‘willingness to pay,’ which is the foundation for free markets. He argues that willingness to pay deserves respect, and high honors in the annals of history, when buyers know what they are getting. It’s when buyers lack information, or suffer from behavioral biases, that they might miswant. Special conundrums also arise when we try to monetize goods we don’t normally consider in monetary terms, like pristine areas, human dignity, and social media. Exploring behavioral biases and their effect on human welfare, Sunstein shows how behavioral economics can be used to increase human happiness.
And from the reviews:
A deep and insightful exploration of a fundamental economic concept that is widely used and rarely interrogated. Sunstein is one of the world’s sharpest minds, and his critical analysis of the ‘willingness to pay’ offers good answers and better questions. Anyone interested in behavioral economics and public policy should put a high value on this excellent book.
—Daniel Gilbert, Edgar Pierce Professor of Psychology, Harvard University, and author of the New York Times best-seller Stumbling on Happiness
Cass Sunstein is an intellectual giant and one of the great thinkers of the modern era. This book is filled with important insights about human behavior and public policy design. Your willingness to pay for this book should be high!
—Hunt Allcott, Stanford University
Sunstein’s insatiable curiosity and joy in wrestling with complicated ideas shines through. The result is a guide to improving our lives by taking advantage of markets, not letting their limitations harm us, and recognizing that we are people with complicated views, not robots. The Price of Happiness is an intellectual tour de force that amazingly is also practical.
—Michael Greenstone, Milton Friedman Distinguished Service Professor of Economics, University of Chicago
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