Richard Thaler Quotes

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.

Economists think about what people ought to do. Psychologists watch what they actually do.

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.

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 mistakes in thinking are inadequacies of perception rather than mistakes of logic.

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.

Except for some effects that I attribute mostly to age, my intuitive thinking is just as prone to overconfidence, extreme predictions, and the planning fallacy as it was before I made a study of these issues.

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.

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!

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.

An interface is humane if it is responsive to human needs and considerate of human frailties.

Positive defaults align our short-term decisions with our long-term interests. And we don't always do that.

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

Fear and greed are potent motivators. When both of these forces push in the same direction, virtually no human being can resist.

We are the greatest computers in this world, but now we've created the smart phone which is smarter than us now, but we're still making dumb decisions. We have given our creations more power than we have, and that to me is dumb.

... balancing competing goals of simplicity, efficiency and equity.

In considering economic behavior, humor is especially important for, needless to say, much of that behavior is infinitely ridiculous.

I practice what has come to be called behavioral economics.

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.

The left-brainer and the economist in me says watch what people do, not what they say.

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.

We accept that people are irrational for good Darwinian reasons. But I don't think we should be so pessimistic as to think that therefore we're forever condemned to be irrational.

[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.

[Research] suggests that what we think of as free will is largely an illusion: much of the time, we are simply operating on automatic pilot, and the way we think and act – and how well we think and act on the spur of the moment – are a lot more susceptible to outside influences than we realize.