Daniel Kahneman Quotes

If you simply announce that things are irrational, then that alone doesn't get you very far. You have to replace rational agents with some concrete notion of what it means to be irrational.

Even the most analytical thinkers are predictably irrational; the really smart ones acknowledge and address their irrationalities.

The lesson of my field, behavioral economics, is that we need to understand the ways in which we differ from the rational human assumed in standard economic theory.

I started in business journalism from the outside, so when I started writing about markets and business, I was struck by the fact that markets seemed to work well even though people are often irrational, lack good information and are not perfect in the way they think about decisions.

Our guts can really mislead us. Sometimes, what we think of as our gut is something else, like an outside influence. If you're going to buy an apartment and it smells of freshly baked bread, you're more likely to want to buy it.

Prediction by analogy -creativity - is so pervasive we normally don't notice it.

Policy makers, like most people, normally feel that they already know all the psychology and all the sociology they are likely to need for their decisions. I don't think they are right, but that's the way it is.

It is true that from a behavioral economics perspective we are fallible, easily confused, not that smart, and often irrational. We are more like Homer Simpson than Superman. So from this perspective it is rather depressing. But at the same time there is also a silver lining. There are free lunches!

We historians are increasingly using experimental psychology to understand the way we act. It is becoming very clear that our ability to evaluate risk is hedged by all sorts of cognitive biases. It's a miracle that we get anything right.

I like to think that since I was about 19, I have studied human decision-making and problem-solving.

Behavioral economics offers a plausible explanation for overreactions by the market. For example, a long period of bad performance can lead to stereotyping.

I love Richard Thaler's 'Quasi Rational Economics.' A collection of some of his most interesting and inventive essays, the real foundation of behavioral economics.

Humans are hard-wired to be irrational when it comes to financial decisions. We must understand that so we don't become the sucker at the poker table.

Most of the time you should use reason, there is no doubt about that because gut often makes us susceptible to lots of different biases, particularly if what you're deciding is something that you really, that expertise can be brought to bear on it, there is a way in which you can align the odds, so then you should really use reason.

Although I am very interested in the subject of human misjudgment - and lord knows I've created a good bit of it - I don't think I've created my full statistical share, and I think that one of the reasons was I tried to do something about this terrible ignorance I left the Harvard Law School with.

If we are to learn to improve the quality of the decisions we make, we need to accept the mysterious nature of our snap judgments.

This is how the human mind works. We see exceptions and spin them into rules. We take slices of information and make sweeping conclusions, as another pair of psychologists, Daniel Kahneman and Amos Tversky, found in their pioneering work on judgment and decision-making.

People react differently to hearing 'Procedure X has a 70 percent chance of survival' and 'Procedure Y has a 30 percent chance of death.' Phrased that way, people flock to Procedure X, even though the numbers are the same.

Logic is a wonderful thing but doesn't always beat actual thought.

And your brain doesn't naturally know how to think the way Zeckhauser knows how to play bridge. "for example," people do not react symmetrically to loss and gain. Well maybe a great bridge player like Zeckhauser does, but that's a trained response. Ordinary people, subconsciously affected by their inborn tendencies.

In strategic decisions, I'd be really concerned about overconfidence.

Economists don't usually make good speculators, because they think too much.

When it comes to the mental world, when we design things like health care and retirement and stock markets, we somehow forget the idea that we are limited. I think that if we understood our cognitive limitations in the same way that we understand our physical limitations … we could design a better world.

Truly successful decision-making relies on a balance between deliberate and instinctive thinking.

One of the big lessons from behavioral economics is that we make decisions as a function of the environment that we're in.