Phishing for Phools: The Economics of Manipulation and Deception by George A. Akerlof, Robert J. Shiller


We live in a world where a plethora of materialistic lures compete for our attention and resources. We in turn are enslaved to and enraptured by wants which might on hindsight be totally inessential or unnecessary. Why is it that we fall prey to the tricks of unscrupulous dealers and businessmen even though we are rational and completely capable of making logical decisions. Why are we rendered incapable and vulnerable at those precise moments which call for clarity, alertness and judiciousness?

Nobel Laureates George Akerloff and Robert Schilling tackle this very vexing question in their new and interesting work “Phishing For Phools”. The title is a take on the most pervasive internet fraud popularly referred to as ‘phishing’. When greedy, smart and cut throat opportunists look for scapegoats to further their economic and monetary prospects, they end up “phishing”. The ones that do manage to land up ultimately in their nets are the phools. Citing examples from diverse sectors of the economy, from Pharmaceuticals to Automotive dealers; from credit card purveyors to the powerful and effective tobacco lobby, Akerloff and Schiller provide authentic instances where the consumer is subject to a wide array of manipulative techniques, deceptive trade practices and false assurances which influence the direction of his/her spending. The sub prime mortgage debacle that resulted in an economic tailspin thereby leading to a global financial crisis (the reverberations of which still holds the world in its thrall) is also a classic example of a multitude of predatory phishermen targeting a ready market of gullible phools.

The authors in the latter half of the book also issue a timely warning to the reader by identifying potential red flags and underhand techniques, an understanding of which will reduce the probability of being sucked into the dangerous web of deceit, desperation and disaster.

“Phishing for Phools” – A Phantastic read!”

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