Offers two extended essays by two eminent social scientists on trusteeship and foundation management. The first essay, by Dr. Moore, reflects the author's long interest in the relations between the economy and the society. He examines trusteeship as a combination and interrelation of three main principles: custodial relations, lay control, and the law of trusts. Dr. Young's essay, the longer and more pragmatic of the two, applies these principles to the actual management of philanthropic foundations. Dr. Young draws upon his experience as a president of two social science foundations in his discussion of both the old and new "proprietary" foundations.

DONALD R. YOUNG is at Rockefeller University.

WILBERT E. MOORE is at the Russell Sage Foundation.

"Yinger writes as if four decades of protest and progressive legislation have barely altered the terrain upon which minority Americans struggle for equality. He's right....Yinger figures that housing discrimination costs black homebuyers $5.7 billion and Hispanic homebuyers $3.4 billion every three years." —Washington Monthly

Nearly three decades after the passage of the Fair Housing Act, illegal housing discrimination against blacks and Hispanics remains rampant in the United States. Closed Doors, Opportunities Lost reports on a landmark nationwide investigation of real estate brokers, comparing their treatment of equally qualified white, black, and Hispanic customers. The study reveals pervasive discrimination. Real estate brokers showed 25 percent fewer homes to the minority buyers, and loan agencies were 60 percent more likely to turn down minority applicants. Realtors and lenders also charged higher prices to minority buyers, withheld or gave insufficient financial and application information, and showed them homes only in non-white neighborhoods. Residents of minority neighborhoods faced further difficulties trying to sell their homes or obtain housing credit and homeowner's insurance.

Economist John Yinger provides a lucid account of these disturbing facts and shows how deeply housing discrimination can affect the living conditions, education, and employment of black and Hispanic Americans. Deprived of residential mobility and discouraged from owning their own homes, many minority families are unable to flee stagnant or unsafe neighborhoods. Two thirds of black and Hispanic children are concentrated in high-poverty schools where educational achievement is low and dropout rates are high. The employment possibilities for minority job-seekers are diminished by the ongoing movement of jobs from the cities to the suburbs, where housing discrimination is particularly severe. Altogether, these effects of housing discrimination create a vicious cycle—discrimination imposes social and economic barriers upon blacks and Hispanics, and the resulting hardships fuel the prejudice that leads whites to associate minorities with neighborhood deterioration.

Closed Doors, Opportunities Lost provides a history of fair housing and fair lending enforcement and joins the intense debate about integration policy. Yinger proposes a bold, comprehensive program that aims not only to end discrimination in housing and mortgage markets but to reverse their long-term effects by stabilizing poorer neighborhoods and removing the stigma of integration. He urges reforms to strengthen the enforcement powers of HUD and other agencies, provide funding for poor and integrated schools, encourage local housing and race-counseling programs, and shift income tax breaks toward low-income homebuyers.

Closed Doors, Opportunities Lost provides valuable insight into the causes, extent, and consequences of housing discrimination—undeniably one of America's most vexing and important problems. This volume speaks directly to the ongoing debate about the nature and causes of poverty and the underclass, civil rights policy, the Community Reinvestment Act, and the plight of our nation's cities.

JOHN YINGER is professor of economics and public administration, and director for the Metropolitan Studies Program at the Center for Policy Research, the Maxwell School, Syracuse University.

"Out of Wedlock skillfully melds the research of leading demographers, economists, and public policy analysts to provide a comprehensive portrait of changes in childbearing and partnering. More so than any other treatment of the topic, Out of Wedlock examines the context of nonmarital childbearing in the United States: how marriage is changing, how much variation exists across the fifty states, how unmarried partnering and childbearing in the United States align with similar trends in Europe. It examines the most compelling questions today: how involved are the fathers of children born outside marriage, is welfare propelling the increase in nonmarital childbearing, what are the consequences for children and the prospects for committed, marital partnering. The quality of the research is outstanding, the importance of the topic unsurpassed."
-SUZANNE M. BIANCHI, University of Maryland

"If all policymakers were to read this book, the debates surrounding government assistance for low-income families would be much better informed."
-WENDELL E. PRIMUS, Center on Budget and Policy Priorities

Today, one third of all American babies are born to unmarried mothers—a startling statistic that has prompted national concern about the consequences for women, children, and society. Indeed, the debate about welfare and the overhaul of the federal welfare program for single mothers was partially motivated by the desire to reduce out of wedlock births. Although the proportion of births to unwed mothers has stopped climbing for the first time since the 1960s, it has not decreased, and recent trends are too complex to attribute solely to policy interventions. What are these trends and how do they differ across groups? Are they peculiar to the United States, or rooted in more widespread social forces? Do children of unmarried mothers face greater life challenges, and if so what can be done to help them? Out of Wedlock investigates these questions, marshalling sociologists, demographers, and economists to review the state of current research and to provide both empirical information and critical analyses.

Out of Wedlock employs a wealth of data, including the age, race, education, and other life circumstances of unwed mothers, and draws telling comparisons with other industrialized nations. Other nations have also experienced sharp increases in nonmarital fertility, but their births largely occur among cohabiting couples. Unwed mothers in the United States tend to be younger, less educated, from minority backgrounds, and to be living separately from their child's father. These trends may help explain the high rate of childhood poverty in this country. Out of Wedlock also examines such issues as the role of child support in providing income to children born outside of marriage, as well as the social and emotional outcomes for children of unwed mothers from infancy through early adulthood.

The conflicting data on nonmarital fertility give rise to a host of vexing theoretical, methodological, and empirical issues, some of which researchers are only beginning to address. Out of Wedlock breaks important new ground, bringing clarity to the data and examining policies that may benefit these particularly vulnerable children.

LAWRENCE L. WU is professor of sociology at the University of Wisconsin, Madison.

BARBARA WOLFE is professor of economics, public affairs, and preventive medicine at the University of Wisconsin, Madison.

CONTRIBUTORS:
Judi Bartfeld, Larry Bumpass, Andrew Cherlin, John Ermisch, Deborah DeGrafe, Michael Foster, Irwin Garfinkel, Robert Haveman, Saul Hoffman, Theodore Joyce, Robert Kaestner, Kelleen Kaye, Kathleen Kiernan, Sanders Korenman, Daniel Lichter, Lee Lillard, Shelley Lundberg, Sara McLanahan, Daniel Meyer, Robert Moffitt, Kelly Musick, Constantijn Panis, Karen Pence, Nancy Reichman, Julien Teitler, Dawn Upchurch, Barbara Wolfe, Lawrence Wu

Winner of the 2008 Michael J. Hindelang Book Award from the American Society of Criminology

Winner of the 2007 Albert J. Reiss, Jr. Distinguished Scholarship Award

"Punishment and Inequality in America is a searing examination of the effects of mass imprisonment on poor black men. Sent to prison in extraordinary numbers, they come out with substantially worsened prospects for employment, income, marriage, and responsible parenting. Bruce Western has now made these huge, but little recognized, effects perfectly clear. The exclusion of prisoners from employment statistics makes black employment rates, incomes, and economic progress look much better than they are. Western offers no easy answers but the message is clear-racial inequality will not diminish by much until mass imprisonment becomes part of America's past."
-MICHAEL H. TONRY, Marvin J. Sonosky Professor of Law and Public Policy, University of Minnesota

"Reflecting a rare combination of empirical analysis and social conscience, Bruce Western skillfully explores the intersection of three troubling phenomena in modern America: the era of mass incarceration, the stubborn racial divide, and the worsening economic prospects of unskilled African American men. This sobering and ambitious book is destined to become the definitive examination of a tragic chapter in American history. For those who care about the direction of our country, Punishment and Inequality in America is a required text."
-JEREMY TRAVIS, president, John Jay College of Criminal Justice, The City University of New York

"The consequences of incarceration have traditionally been debated in terms of crime control. Bruce Western is one of the leading scholars of a new movement that seeks to understand institutions of social control within the broader scope of social inequality. Punishment and Inequality in America brings together in one place the results of his research program, essential reading for a deeper appreciation of the role that mass incarceration has played in an increasingly stratified society."
-ROBERT J. SAMPSON, Henry Ford II Professor of the Social Sciences and chair, Department of Sociology, Harvard University

Over the last thirty years, the prison population in the United States has increased more than seven-fold to over two million people, including vastly disproportionate numbers of minorities and people with little education. For some racial and educational groups, incarceration has become a depressingly regular experience, and prison culture and influence pervade their communities. Almost 60 percent of black male high school drop-outs in their early thirties have spent time in prison. In Punishment and Inequality in America, sociologist Bruce Western explores the recent era of mass incarceration and the serious social and economic consequences it has wrought.

Punishment and Inequality in America dispels many of the myths about the relationships among crime, imprisonment, and inequality. While many people support the increase in incarceration because of recent reductions in crime, Western shows that the decrease in crime rates in the 1990s was mostly fueled by growth in city police forces and the pacification of the drug trade. Getting “tough on crime” with longer sentences only explains about 10 percent of the fall in crime, but has come at a significant cost. Punishment and Inequality in America reveals a strong relationship between incarceration and severely dampened economic prospects for former inmates. Western finds that because of their involvement in the penal system, young black men hardly benefited from the economic boom of the 1990s. Those who spent time in prison had much lower wages and employment rates than did similar men without criminal records. The losses from mass incarceration spread to the social sphere as well, leaving one out of ten young black children with a father behind bars by the end of the 1990s, thereby helping perpetuate the damaging cycle of broken families, poverty, and crime.

The recent explosion of imprisonment is exacting heavy costs on American society and exacerbating inequality. Whereas college or the military were once the formative institutions in young men’s lives, prison has increasingly usurped that role in many communities. Punishment and Inequality in America profiles how the growth in incarceration came about and the toll it is taking on the social and economic fabric of many American communities.

BRUCE WESTERN is professor of sociology at Princeton University.

"The Russell Sage series on job quality is a very welcome contribution in a world where employment seems to be polarizing. Low-Wage Work in Denmark is especially noteworthy because the Danish case is internationally regarded as a model to follow if we desire flexible labor markets without social exclusion. And, as Niels Westergaard-Nielsen and his colleagues show in their laudably balanced and empirically rich analyses, the model does seem to work. Danish low-wage workers clearly fare much better than elsewhere. This excellent study explains why. It is a must-read for policymakers and analysts; an indispensable resource for social scientists."
-GØSTA ESPING-ANDERSEN, professor of sociology, Universitat Pompeu Fabra, Barcelona

"All nations struggle with the problem of unskilled working-age people. 'Flexicurity' -few labor restrictions and a generous safety net-is Denmark's unique arrangement. There, the unskilled are not poor, move rapidly out of low-skill jobs, and are treated with dignity-all huge accomplishments. But the system also creates problems-high tax rates, welfare dependency, and costs, and the effective exclusion of immigrants. Low-Wage Work in Denmark, a volume in the Russell Sage series of systematic, cross- country analyses of low-wage work, gives us a careful and in-depth assessment-both blemishes and beauty-of this small country's approach."
-ROBERT HAVEMAN, professor emeritus of public affairs and economics, Robert M. La Follette School of Public Affairs, University of Wisconsin-Madison

"For millions of employed Americans, 'work doesn't pay,' occupational and social benefits are meager, and opportunities for shifting into substantially higher-paying work are scarce. American analysts often view low-paid work as the lamentable but inevitable byproduct of a flexible labor market, technological advancement, and the global economy. This first-rate volume will challenge that sense of resignation, as it vividly demonstrates that a multitude of institutional reforms could both reduce the incidence of low-wage work and lessen its problematic consequences. The Danish flexicurity model, which melds flexibility for employers with economic security for workers, operates alongside impressive economic outcomes, including comparatively high labor force participation, low unemployment, and high mobility out of low-wage work. This accessible collection outlines an institutional blueprint that could help structure an overhaul of low-wage work in the United States should the political opportunity arise."
-JANET GORNICK, professor, political science and sociology, City University of New York, and director, Luxembourg Income Study

The Danish economy offers a dose of American labor market flexibility inside a European welfare state. The Danish government allows employers a relatively high level of freedom to dismiss workers, but also provides generous unemployment insurance. Widespread union coverage and an active system of collective bargaining help regulate working conditions in the absence of strong government regulation. Denmark’s rate of low-wage work—8.5 percent—is the lowest of the five countries under analysis. In Low-Wage Work in Denmark, a team of Danish researchers combines comprehensive national registry data with detailed case studies of five industries to explore why low-end jobs are so different in Denmark. Some jobs that are low-paying in the United States, including hotel maids and meat processors, though still demanding, are much more highly compensated in Denmark. And Danes, unlike American workers, do not stay in low-wage jobs for long. Many go on to higher paying jobs, while a significant minority ends up relying temporarily on income support and benefits sustained by one of the highest tax rates in the world.  Low-Wage Work in Denmark provides an insightful look at the particularities of the Danish labor market and the lessons it holds for both the United States and the rest of Europe.

NIELS WESTERGAARD-NIELSEN is professor of economics at the School of Business, University of Aarhus.

CONTRIBUTORS: Anne-Mette Sonne, Nuka Buck, Tor Eriksson, Lars Esbjerg, Jacob K. Eskildsen, Klaus K. Grunert, Jingkun Li, Ann-Kristina Lokke Nielsen, Robert Solow, Ole Henning Sorensen.

A Volume in the RSF Case Studies of Job Quality in Advanced Economies

After Ellis Island is an unprecedented study of America's foreign-born population at a critical juncture in immigration history. The new century had witnessed a tremendous surge in European immigration, and by 1910 immigrants and their children numbered nearly one third of the U.S. population. The census of that year drew from these newcomers a particularly rich trove of descriptive information, one from which the contributors to After Ellis Island draw to create an unmatched profile of American society in transition.

Chapters written especially for this volume explore many aspects of the immigrants' lives, such as where they settled, the jobs they held, how long they remained in school, and whether or not they learned to speak English. More than a demographic catalog, After Ellis Island employs a wide range of comparisons among ethnic groups to probe whether differences in childbirth, child mortality, and education could be traced to cultural or environmental causes. Did differences in schooling levels diminish among groups in the same social and economic circumstances, or did they persist along ethnic lines? Did absorption into mainstream America—measured through duration of U.S. residence, neighborhood mingling, and ability to speak English—blur ethnic differences and increase chances for success? After Ellis Island also shows how immigrants eased the nation's transition from agriculture to manufacturing by providing essential industrial laborers.

After Ellis Island offers a major assessment of ethnic diversity in early twentieth century American society. The questions it addresses about assimilation and employment among immigrants in 1910 acquire even greater significance as we observe a renewed surge of foreign arrivals. This volume will be valuable to sociologists and historians of immigration, to demographers and economists, and to all those interested in the relationship of ethnicity to opportunity.

SUSAN COTTS WATKINS is associate professor at the University of Pennsylvania.

CONTRIBUTORS: Robert F. Dymowski, Douglas Ewbank, Margaret E. Greene, Mark Hereward, Jerry A. Jacobs, Antonio McDaniel, Andrew T. Miller, Ann R. Miller, Ewa Morawska, S. Philip Morgan, Samuel H. Preston, Arodys Robles, Shilian Wang, Susan Cotts Watkins, and Michael J. White

New York City stands as the first expression of the modern city, a mosaic of disparate neighborhoods born in 1898 with the amalgamation of the five boroughs and shaped by the passions of developers and regulators, architects and engineers, politicians and reformers, immigrant entrepreneurs and corporate builders. Through their labor, their ideals, and their often fierce battles, the physical and social dimensions—the landscape—of the modern city were forged. The original essays in The Landscape of Modernity tell the compelling story of the growth of New York City from 1900 to 1940, from the beginnings of its skyscraper skyline to the expanding reaches of suburbanization.

At the beginning of the century, New York City was already one of the world's leading corporate and commercial centers. The Zoning Ordinance of 1916, initially proposed by Fifth Avenue merchants as a means of halting the uptown spread of the garment industry, became the nation's first comprehensive zoning law and the proving ground for a new occupation—the urban planner. During the 1920s, frenzied development created a vertical metamorphosis in Manhattan's booming business district, culminating in its most spectacularly modern icon, the Empire State Building. The city also spread laterally, with the controversial development of subway systems and the creation of the powerful Port of New York Authority, whose new bridges and tunnels decentralized the population and industry of New York. New York's older ethnic enclaves were irrevocably altered by this new urban landscape: the Lower East Side's Jewish community was nearly dismantled by the flight of the garment industry and the attractiveness of new suburbs, while Little Italy fought government forces eager to homogenize commercial use of the streets by eliminating the traditional pushcart peddlers.

Illustrated with striking photographs and maps, The Landscape of Modernity links important scenes of growth and development to the larger political, economic, social, and cultural processes of the early twentieth century.

DAVID WARD is professor of geography and Vice-Chancellor at the University of Wisconsin, Madison.

OLIVIER ZUNZ is professor of history at the University of Virginia.

CONTRIBUTORS: Daniel Bluestone, Jameson W. Doig, Gail Fenske, Robert Fishman, Donna Gabaccia, Nancy L. Green, Deryck Holdsworth, Clifton Hood, Thomas Kessner, Deborah Dash Moore, David Nasaw, Keith D. Revel, David Ward, Marc A. Weiss, Carol Willis, Olivier Zunz.

Winner of the 1997 Thomas and Znaniecki Award from the International Migration Section of the American Sociological Association

" ... a fascinating portrait of immigrant racial and ethnic groups in Los Angeles, offering a long-needed West Coast balance to our heretofore largely Northeastern view of these populations. And if Los Angeles is indeed the place 'to detect the shape of emerging America,' this book concurrently provides a first glimpse into the country's social structure and culture in the 21st century."
-Herbert J. Gans, Columbia University

"Waldinger, Bozorgmehr, and their UCLA team have assembled a superb sourcebook for the recent history of immigration, ethnicity, and opportunity in a deeply multicultural city. Read them to learn about America's future."
-Charles Tilly, Columbia University

" ... a scholarly achievement, a rare example of a multi-authored, edited volume that makes a strong, coherent argument as well as a narrative accessible to the layman and policy- maker ... with an analytical structure and intellectual rigor that will challenge and direct the next generation of research."
-Michael J. Piore, Massachusetts Institute of Technology

Since 1965 more immigrants have come to Los Angeles than anywhere else in the United States. These newcomers have rapidly and profoundly transformed the city's ethnic makeup and sparked heated debate over their impact on the region's troubled economy. Ethnic Los Angeles presents a multi-investigator study of L.A.'s immigrant population, exploring the scope, characteristics, and consequences of ethnic transition in the nation's second most populous urban center.

Using the wealth of information contained in the U.S. censuses of 1970, 1980, and 1990, essays on each of L.A.'s major ethnic groups tell who the immigrants are, where they come from, the skills they bring and their sources of employment, and the nature of their families and social networks. The contributors explain the history of legislation and economic change that made the city a magnet for immigration, and compare the progress of new immigrants to those of previous eras. Recent immigrants to Los Angeles follow no uniform course of adaptation, nor do they simply assimilate into the mainstream society. Instead, they have entered into distinct niches at both the high and low ends of the economic spectrum. While Asians and Middle Easterners have thrived within the medical and technical professions, low-skill newcomers from Central America provide cheap labor in light manufacturing industries.

As Ethnic Los Angeles makes clear, the city's future will depend both on how well its economy accommodates its diverse population, and on how that population adapts to economic changes. The more prosperous immigrants arrived already possessed of advanced educations and skills, but what does the future hold for less-skilled newcomers? Will their children be able to advance socially and economically, as the children of previous immigrants once did? The contributors examine the effect of racial discrimination, both in favoring low-skilled immigrant job seekers over African Americans, and in preventing the more successful immigrants and native-born ethnic groups from achieving full economic parity with whites.

Ethnic Los Angeles is an illuminating portrait of a city whose unprecedented changes are sure to be replicated in other urban areas as new concentrations of immigrants develop. Backed by detailed demographic information and insightful analyses, this volume engages all of the issues that are central to today's debates about immigration, ethnicity, and economic opportunity in a post-industrial urban society.

ROGER WALDINGER is professor of sociology and acting director of the Lewis Center for Regional Policy Studies, University of California, Los Angeles.

MEHDI BOZORGMEHR is assistant professor of sociology at City College, City University of New York.

CONTRIBUTORS
Lucie C. Cheng, William A. V. Clark, Claudia DeMartirosian, David Grant, Angela James, John Laslett, Michael Lichter, Ivan Light, David Lopez, Ali Modarres, Melvin Oliver, Paul Ong, Vilma Ortiz, Eric Popkin, Betsy Roach, Georges Sabagh, Allen J. Scott, Edward Telles, Abel Valenzuela, Philip Yang

"Emotions have always seemed important in decision making, but no one quite knew how. This volume now provides new explanations based on new discoveries by a new generation of affective and decision scientists. Their contributions address a key question about the role of emotion in human behavior: Do emotions help and hurt decisions? Their clear, sometimes surprising, answers greatly expand what we thought we knew about how emotions direct decisions. I recommend reading this book!"
GERALD L. CLORE, Commonwealth Professor of Psychology, University of Virginia

"The pace of research on emotion and decision making is accelerating. The editors and authors of this book have designed a new creature, the hedgefox, to provide nuanced answers to important questions about the dance of emotion and reason in decision making. Researchers in this field should definitely read Do Emotions Help or Hurt Decision Making? to see what the hedgefox has to offer."
-PAUL SLOVIC, president, Decision Research

Philosophers have long tussled over whether moral judgments are the products of logical reasoning or simply emotional reactions. From Jane Austen’s Sense and Sensibility to the debates of modern psychologists, the question of whether feeling or sober rationality is the better guide to decision making has been a source of controversy. In Do Emotions Help or Hurt Decision Making? Kathleen Vohs, Roy Baumeister, and George Loewenstein lead a group of prominent psychologists and economists in exploring the empirical evidence on how emotions shape judgments and choices.

Researchers on emotion and cognition have staked out many extreme positions: viewing emotions as either the driving force behind cognition or its side effect, either an impediment to sound judgment or a guide to wise decisions. The contributors to Do Emotions Help or Hurt Decision Making? provide a richer perspective, exploring the circumstances that shape whether emotions play a harmful or helpful role in decisions. Roy Baumeister, C. Nathan DeWall, and Liqing Zhang show that while an individual’s current emotional state can lead to hasty decisions and self-destructive behavior, anticipating future emotional outcomes can be a helpful guide to making sensible decisions. Eduardo Andrade and Joel Cohen find that a positive mood can negatively affect people’s willingness to act altruistically. Happy people, when made aware of risks associated with altruistic acts, become wary of jeopardizing their own well-being. Benoît Monin, David Pizarro, and Jennifer Beer find that whether emotion or reason matters more in moral evaluation depends on the specific issue in question. Individual characteristics often mediate the effect of emotions on decisions. Catherine Rawn, Nicole Mead, Peter Kerkhof, and Kathleen Vohs find that whether an individual makes a decision based on emotion depends both on the type of decision in question and the individual’s level of self-esteem. And Quinn Kennedy and Mara Mather show that the elderly are better able to regulate their emotions, having learned from experience to anticipate the emotional consequences of their behavior.

Do Emotions Help or Hurt Decision Making? represents a significant advance toward a comprehensive theory of emotions and cognition that accounts for the nuances of the mental processes involved. This landmark book will be a stimulus to scholarly debates as well as an informative guide to everyday decisions.

KATHLEEN D. VOHS is the McKnight Land-Grant Professor and assistant professor in the Carlson School of Management at the University of Minnesota.

ROY F. BAUMEISTER is the Francis Eppes Eminent Scholar and professor of psychology at Florida State University.

GEORGE LOEWENSTEIN is the Herbert A. Simon Professor of Economics and Psychology at Carnegie Mellon University.

CONTRIBUTORS: Christopher J. Anderson, Eduardo B. Andrade, Roy F. Baumeister, Jennifer S. Beer, Joel B. Cohen, C. Nathan DeWall, Matthew T. Gailliot, Karen Gasper, Lorenz Goette, David Huffman, Linda M. Isbell, Quinn Kennedy, Peter Kerkhof, Jonathan Levav, Debra Lieberman, George Loewenstein, Mara Mather, Nicole L. Mead, Benoît Monin, Robert Oum, David A. Pizarro, Catherine D. Rawn, Dianne M. Tice, Jennifer L. Trujillo, Kathleen D. Vohs, Piotr Winkielman, John M. Zelenski, and Liqing Zhang
 

Standard economic theory is built on the assumption that human beings act rationally in their own self interest. But if rationality is such a reliable factor, why do economic models so often fail to predict market behavior accurately? According to Richard Thaler, the shortcomings of the standard approach arise from its failure to take into account systematic mental biases that color all human judgements and decisions. Economics assumes behavior is consistently rational, when it is, in fact, only partially, or quasi-rational.

The papers collected in Quasi-Rational Economics represent a significant sampling of this innovative approach, written by a leader in the field along with co-authors Thomas Russell, H. M. Shefrin, Daniel Kahneman, Jack Knetsch, Werner De Bondt, Eric Johnson, Charles Lee, and Andrei Shleifer. Thaler and his colleagues challenge established economic theories in such areas as consumer choice and financial markets, offering empirical evidence and alternate models based on behavioral research about how economic decisions are actually made.

Quasi-Rational Economics deals with a number of intriguing questions. Why do people have trouble ignoring sunk costs and recognizing opportunity costs? How do people’s preferences for already endowed possessions suppress trading volume and keep markets from clearing? What are the effects on market behavior of consumer attitudes about fairness? How do people’s mental accounting procedures lead them to behave in economically inconsistent ways? Why do investors’ tendencies to overreact to past trends cause losing firms to outperform winners in the stock market?

In offering answers to these questions, Quasi-Rational Economics provides an essential introduction to a new field. It mounts a trenchant critique of current practice in economics and calls for richer, more realistic approaches to formulating and testing economic theory. More than just a call for reform, this book provides numerous illustrations of how the call can be answered.

"Richard Thaler's book offers great evidence for the importance of quasi rational behavior in economic settings, thus stimulating the reader. Its broad coverage makes an interesting introduction to a new field, as well as informing about further applications and methods." —Kyklos

RICHARD H. THALER is Henrietta Johnson Louis Professor of Economics and director of the Center for Behavioral Economics and Decision Research, Johnson Graduate School of Management, Cornell University. He is research associate at the National Bureau of Economic Research.