Irrational Together - by Adam S Hayes (Hardcover)

About the Book

"In this new book, sociologist Adam Hayes brings a sociologist's toolkit to bear on the influential field of behavioral economics, arguing that scholars in that area have overemphasized a psychological approach at the expense of social factors such as race and gender that significantly shape our decision making. Behavioral economics has done much to amend classical economic theory's tenet that individuals behave rationally--that is to say, in their own economic best interest. Behavioral economists instead consider the complex factors that influence how an individual approaches a given financial choice. Adam Hayes takes this approach further yet, showing how social forces beyond an individual mind affect decision making. Interpersonal relations, social position, culture, institutions, and technology play a role in economic activities such as saving and investing, borrowing and lending, and financial risk-taking. Hayes shows how cultural factors can first determine an economic disposition, which affects how we think about and relate to financial decisions. He then demonstrates that our social networks guide our thinking about money, reinforcing cultural norms like fairness, reciprocity, revenge, and inclusion or exclusion. Hayes also tackles a huge driver of economic inequality, which is usually addressed only descriptively by economists: gender. While economists might acknowledge that women are less likely to invest in the stock market or are paid less for their labor, they don't generally look at the cultural factors that lead to these discrepancies. What Hayes gives us is a way of understanding the why of these discrepancies, rather than merely acknowledging that they exist. Behavioral economists have argued that psychological nudges can help redress "irrational" economic decisions and promote greater wealth equality, but Hayes shows that these cognitive approaches are only a part of the picture. To begin to correct major disparities in our social understanding of wealth and money, we need to engineer financial systems that consider a diversity of social backgrounds"--

Book Synopsis

A must-read that reshapes how we think about the social underpinnings of our financial choices.

In Irrational Together, economic sociologist Adam S. Hayes takes readers on a fascinating journey to uncover the often-unseen social forces that shape our financial behavior. Drawing on original research and engaging real-world examples, Hayes challenges not only the notion that economic decisions are purely rational but also the prevailing behavioral economics view that irrational choices stem primarily from individual beliefs. Instead, he argues that our economic choices and actions are deeply embedded in our social and cultural contexts and that understanding these influences is crucial to fully grasp the complexities of financial decision-making.

From the impact of social class and cultural capital on risk-taking and the role of social networks and group identities in shaping consumer choices to the gendered dimensions of financial advice and literacy, this book weaves together insights from sociology, behavioral economics, and cultural studies to paint a nuanced picture of how we navigate the economic landscape as inherently social beings. Why, for example, would someone choose to continue paying 20% interest on a large credit card debt rather than taking out a low-interest mortgage on their home to pay off the card? As Hayes makes clear through rigorous analysis, cultural values--like those related to home ownership--hold as much or more sway over us than financial best practices.

Bridging the gap between behavioral economics and sociology, this groundbreaking work paves the way for a more holistic understanding of the social and cultural influences on economic behavior. Hayes also looks to the future and argues that to correct major disparities in our social understanding of wealth and money, we need to construct financial systems that consider a diversity of social backgrounds.

With its accessible language and thought-provoking insights, Irrational Together is an essential guide for anyone seeking to understand the intersection of money, society, and human behavior.

Review Quotes

"Explores the social and cultural dimensions of economic behavior, highlighting how individuals from different cultural backgrounds may have fundamentally different approaches to economic life."-- "Journal of Economic Literature"

""Economic action is social action. In Irrational Together Adam Hayes spells out what that means for our understanding of economic decision-making: Economic behavior is deeply engrained in social norms, relational contexts, status concerns, and shared experiences. By explaining how to move beyond the individualistic limitations of behavioral economics, Hayes makes a significant contribution to economic sociology, providing readers with a deeper understanding of the social forces influencing economic choices."--Jens Beckert, author of 'Imagined Futures. Fictional Expectations and Capitalist Dynamics'

"Boldly and with great style, Adam Hayes takes on the formidable task of explaining how our economic lives really work and why the sociological perspective matters. The result is a tour de force, blending theoretical insight with sparkling examples. Irrational Together is not only a must read for experts in economic processes but will also captivate a broader audience."--Viviana A. Zelizer, author of 'Economic Lives: How Culture Shapes the Economy'

About the Author

Adam S. Hayes is professor of sociology at the University of Lucerne. Before entering academia, he worked as an options market maker and equity derivatives sales trader and was licensed as a financial advisor.