In June 2020 I was preparing the material for my summer school “Economics of Misbehavior” [Link] and I decided to read Dostoevsky’s short novel Notes from Underground [Link]. The principal character is a retired mid-level government bureaucrat living in St. Petersburg that cannot stop humiliating himself and embarrassing others. I love this book and I think it is a masterpiece of the literature and a must-read book for behavioral economists. In the first part of the novel, the underground man says that human beings are inconsistent and unknowable. They have no logic and their actions make little (or no) sense. In short, Notes from Underground describe human perversity and illogicality.
This novel is a nice contrast to “our” Rational Choice Theory that provides precise theoretical models to understand and predict human behavior. We assume that humans are rational beings and capable of conducting ourselves in logical ways. Dostoevsky hates the idea that if we strived to be more rational, we would stop acting in ways that harmed ourselves and society. He wrote that there are millions of instances where people have knowingly gone against choices that would bring them the greatest “utility” and well-being. To understand human (mis)behavior we need to understand that an individual is not a “sort of piano key or a sprig in an organ”. It is something more complex.
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