Thinking,Fast and Slow (2011) by Daniel Kahneman is a book on how people actually think and their mistakes that has been glowingly reviewed. Kahneman won the Noble Prize in Memory of Alfred Noble for Economics.
Kahneman presents the brain as having an instinctive system one that is used for complex judgements and judgements that must be made quickly and a conscious, reflective system 2 that calculates and reasons through things.
Kahneman goes through the biases and errors due to overconfidence, misunderstandings of what small sample sizes yield and how people construct stories that are based on conglomerations of their biases.
Kahneman’s book has been gazumped by various books that have used the conclusions and rules in the books for other popular books on the subject. Many popular economics have covered the same territory. Irrationality by Stuart Sutherland is the best book I’ve read on the topic. Kahneman may be a prize winner but his book is a bit laboured. It’s still well worth reading it’s just that the adulation in the popular press is overdone.