Richard Thaler Quotes

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.

The concept of loss aversion is certainly the most significant contribution of psychology to behavioral economics.

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.

Interestingly, human irrationality is a hot topic in economics at the moment. Behavioural economics it's called, on the cusp of economics and psychology.

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

In psychology and behavioral economics, people have shown that if you just describe options in a certain way, or make some features of a situation salient, you can get people to do and even see what you want. You don't have to be a Jedi to manipulate people's attention.

In the world of traditional economics, it shouldn't matter whether you use an opt-in or opt-out system. So long as the costs of registering as a donor or a nondonor are low, the results should be similar. But many findings of behavioral economics show that tiny disparities in such rules can make a big difference.

[There will be movement toward] behavioral economics... [which] involves study of those aspects of men's images, or cognitive and affective structures that are more relevant to economic decisions.

I think one of the major results of the psychology of decision making is that people's attitudes and feelings about losses and gains are really not symmetric. So we really feel more pain when we lose $10,000 than we feel pleasure when we get $10,000.

The sad truth is that many behavioral economists know very little about psychology.

Sunk costs? We pay too much attention to them.

It is true that I am one of the co-authors of 'Nudge,' and I am a behavioral economist, but it does not mean that everything we write about in that book is behavioral economics, nor does it mean that my co-author, the distinguished legal scholar Cass Sunstein, is a behavioral economist.

Whereas economic man maximises, selects the best alternative from among all those available to him, his cousin, administrative man, satisfices, looks for a course of action that is satisfactory or 'good enough'.

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.

The classical theory of omniscient rationality is strikingly simple and beautiful.

My research career has been devoted to understanding human decision-making and problem-solving processes. The pursuit of this goal has led me into the fields of political science, economics, cognitive psychology, computer science and philosophy of science, among others.

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!

Personally, I don't see old economics and behavioural economics as opposed. It is useful to assume people are rational as a good approximation to their long term behaviour, but it would be unwise not to think how in practice their behaviour may deviate from that simplifying assumption.

There is much evidence that people are not rational, in the economist’s sense; nor do they take into account expectation, in the precise interpretation of that word. As a result, economic theory often does not correspond with what happens in the market. Some would argue that we need descriptive economics. I would argue that all should be taught about probability, utility, and MEU (maximization of expected utility) and act accordingly.

Economists discount any factors that would not influence the thinking of a rational person.

Traditional economics is based on imaginary creatures sometimes referred to as 'Homo economicus.' I call them Econs for short. Econs are amazingly smart and are free of emotion, distraction or self-control problems. Think Mr. Spock from 'Star Trek.'

We behavioralists differ from our more traditional brethren in the way we characterize agents in the economy.

A nudge is some feature of the environment that changes the behaviour of humans but would not change the behaviour of rational economic agents, what we call Econs.

Early in my doctoral training at Cornell University, I became immersed in the behavioral decision theory paradigm.

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.