Daniel Kahneman is a psychologist who won the Nobel Prize for Economics — becoming the first non-Economist to win that distinction. He summarized the field in a wonderful tome called Thinking Fast and Slow. The basic thrust of the book is that we have a number of unconscious heuristics and biases that drive our decision making — which work well MOST of the time but not ALL of the time. On a different note, Kahneman gave a fascinating TED talk about happiness that’s well worth watching. Kahnemann’s book is a fantastic tome but a little long for the people new to the field. If you want something that’s a little quicker on the topic, check out Dan Ariely’s books Predictably Irrational and The Upside of Irrationality. I wrote a few hundred words summarizing Ariely’s work on default settings as well. For more of a financial look at this, check out Nicholas Nassim Taleb’s books Fooled by Randomness and The Black Swan.