“The Confidence Game: Why We Fall For It… Every Time” by Maria Konnikova

This is yet another breezy book that relies heavily on behavioral economic concepts. Con artists rely on the status quo bias, the optimism bias, loss aversion, and anchoring effects to make people act like suckers. Everybody thinks that they are above average and take credit for their own good circumstances, while explaining away their bad events as bad luck. Con artists know all these biases and they rely on psychology to manipulate others to get what they want. There is always a grain of truth in every scam. That’s what makes them so effective. Con artists are not sociopaths or psychopaths. They know right from wrong, exactly what they are doing, and that is how they are able to skillfully manipulate other’s emotions. This book details familiar scams like John Law’s Mississippi bubble, Charles Ponzi’s scheme, and Bernie Madoff. More interestingly, it relates how people such as evangelical preachers, realtors, and car salesmen use the same psychological tricks as these hucksters in everyday legal interactions.