Books

Coming soon

May Contain Lies: How Stories, Statistics, and Studies Exploit Our Biases – And What We Can Do About It

Penguin Random House, 2024.

A ground-breaking book that reveals why our human biases effect the way we receive and interpret information.

Our lives are minefields of misinformation. Stories, statistics and studies lie to us on a daily basis. Not only this but, as Professor Alex Edmans reveals, our brains lie to us too. He argues that we need to acknowledge and understand the role that our own human biases play in interpreting and digesting the information that we consume. It’s only when we do, that we can actively resist being manipulated, and make informed decisions that improve our lives.

Coming soon

May Contain Lies: How Stories, Statistics, and Studies Exploit Our Biases – And What We Can Do About It

Penguin Random House, 2024.

A ground-breaking book that reveals why our human biases effect the way we receive and interpret information.

Our lives are minefields of misinformation. Stories, statistics and studies lie to us on a daily basis. Not only this but, as Professor Alex Edmans reveals, our brains lie to us too. He argues that we need to acknowledge and understand the role that our own human biases play in interpreting and digesting the information that we consume. It’s only when we do, that we can actively resist being manipulated, and make informed decisions that improve our lives.

Grow the Pie: How Great Companies Deliver Both Purpose and Profit

Cambridge University Press, 2020; updated paperback, 2021.

Financial Times Books of the Year, 2020. FT/ISFFC Award for Excellence in Sustainable Finance Education, 2021.

What is a responsible business? Common wisdom is that it’s one that sacrifices profit for social outcomes. But while it’s crucial for companies to serve society, they also have a duty to generate profit for investors – savers, retirees, and pension funds. Based on the highest-quality evidence and real-life examples spanning industries and countries, Alex Edmans shows that it’s not an either-or choice – companies can create both profit and social value. The most successful companies don’t target profit directly, but are driven by purpose – the desire to serve a societal need and contribute to human betterment. The book explains how to embed purpose into practice so that it’s more than just a mission statement, and discusses the critical role of working collaboratively with a company’s investors, employees, and customers. Rigorous research also uncovers surprising results on how executive pay, shareholder activism, and share buybacks can be used for the common good.

  • A short summary is in Edmans, Alex (2020): Company Purpose and Profit Need Not be in Conflict if We ‘Grow the Pie Economic Affairs 40(2), 287-294, June 2020.
  • A review by Christina Skinner (Wharton) is in Cancelling Capitalism? Notre Dame Law Review 97(1), 417-440, December 2021.
  • A review by Hamid Boustanifar (EDHEC) is in An Alternative to Shareholder Capitalism? Journal of International Financial Management and Accounting, 34(2), 378-383, June 2023.
  • The following translations have been published:
    • Arabic: كبر الكعكة: كيف تقدم الشركات العظيمة قيمة وربحًا
    • Chinese: “蛋糕经济学:如何实现企业商业价值和社会责任的双赢”
    • French: Grow the Pie: Comment les Entreprises Peuvent Fair des Bénéfices et Servir le Bien Commun.
    • Japanese: GROW THE PIE パーパスと利益の二項対立を超えて、持続可能な経済を実現する
    • Korean: ESG 파이코노믹스
    • Turkish: Pastayı Büyüt: Büyük Şirketler Nasıl Hem Değer Yaratır Hem De Kâr Ederler.
  • Italian, Portuguese, and Russian translations are in progress.

Principles of Corporate Finance

McGraw-Hill, 2022; 14th edition (with Brealey, Myers and Allen).

This was the book I first learned finance from as an undergrad at Oxford, and all new analysts were given it at Morgan Stanley, so it’s an honor to now be a coauthor. But while the book has been a standard for decades, it needs to evolve. Here’s what we’ve tried to improve:

  • Standard finance theory focuses on shareholder value. We take seriously the idea that a CEO should promote the interests of all stakeholders, and analyze whether/when to depart from the NPV tool that’s been taught forever (if so, what to replace it with; but also when NPV works fine). We’ve devoted an entire new chapter to Responsible Business. But, it’s not just something that can be pigeon-holed into a single chapter; it pervades the whole book. Out of the five principles that governed prior editions, we’ve rewritten #2 to stress that managers consider “the long-term consequences of all decisions, including their effects on stakeholders such as customers, employees, and the environment”.
  • The chapter on Corporate Governance – who a CEO runs a company for and the mechanisms to ensure it’s run in the right way – has similarly been substantially rewritten.
  • The chapter on Market Efficiency has been overhauled. It takes much more seriously behavioral finance, evidence for behavioral biases, and challenges to the Efficient Markets Hypothesis.
  • Modern finance is advancing due to AI, big data, and cloud computing. We analyse seven ways in which FinTech is changing financial practice.
  • A U.S. financial manager works in a global environment, so s/he needs to understand the financial systems of other countries. Also, many readers are non-US. The 14th edition is much more global, including information about major developing economies.
  • In addition to the content, we’ve made pedagogical changes throughout. The material is much more clearly explained and easier to understand – importantly, without dumbing it down. It’s been tightened, not loosened – terms are precisely defined and definitions are less hand-wavy. We include end-of-chapter summaries to make the takeaways clearer, and include self-test questions (with answers) so that readers can check their understanding.

Principles of Corporate Finance

McGraw-Hill, 202; 14th edition (with Brealey, Myers and Allen).

This was the book I first learned finance from as an undergrad at Oxford, and all new analysts were given it at Morgan Stanley, so it’s an honor to now be a coauthor. But while the book has been a standard for decades, it needs to evolve. Here’s what we’ve tried to improve:

  • Standard finance theory focuses on shareholder value. We take seriously the idea that a CEO should promote the interests of all stakeholders, and analyze whether/when to depart from the NPV tool that’s been taught forever (if so, what to replace it with; but also when NPV works fine). We’ve devoted an entire new chapter to Responsible Business. But, it’s not just something that can be pigeon-holed into a single chapter; it pervades the whole book. Out of the five principles that governed prior editions, we’ve rewritten #2 to stress that managers consider “the long-term consequences of all decisions, including their effects on stakeholders such as customers, employees, and the environment”.
  • The chapter on Corporate Governance – who a CEO runs a company for and the mechanisms to ensure it’s run in the right way – has similarly been substantially rewritten.
  • The chapter on Market Efficiency has been overhauled. It takes much more seriously behavioral finance, evidence for behavioral biases, and challenges to the Efficient Markets Hypothesis.
  • Modern finance is advancing due to AI, big data, and cloud computing. We analyse seven ways in which FinTech is changing financial practice.
  • A U.S. financial manager works in a global environment, so s/he needs to understand the financial systems of other countries. Also, many readers are non-US. The 14th edition is much more global, including information about major developing economies.
  • In addition to the content, we’ve made pedagogical changes throughout. The material is much more clearly explained and easier to understand – importantly, without dumbing it down. It’s been tightened, not loosened – terms are precisely defined and definitions are less hand-wavy. We include end-of-chapter summaries to make the takeaways clearer, and include self-test questions (with answers) so that readers can check their understanding.