Evan Davis Quotes

The great thing about behavioural psychology and economics is that they help us to see that there are actually pretty good reasons why human beings swing from greed to fear, and why we're not really calculating machines or utility-maximisers.

I practice what has come to be called behavioral economics.

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 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.

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.

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.

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.

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.

Put simply, behavioural economics argues that human beings' decision-taking is guided by the evolutionary baggage which we bring with us to the present day. Evolution has made us rational to a point, but not perfectly so. It has given us emotions, for example, which programme us to override our rational brain and act more instinctively.

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.

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

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

You have a natural tendency to want an emotionally satisfying tale - and to make investments based on that - despite times when the actual data may be telling you something different.

One of the key elements of human behavior is, humans have a greater fear of loss than enjoyment of success. All the academic studies will show you that the fear of loss of capital is far greater than the enjoyment of gains.

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.

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

The mistakes we make when we try to imagine our personal futures are also lawful, regular, and systematic. They, too, have a pattern that tells us about the powers and limits of foresight in much the same way that optical illusions tell us about the powers and limits of eyesight.

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

Humans make errors. We make errors of fact and errors of judgment. We have blind spots in our field of vision and gaps in our stream of attention. Sometimes we can't even answer the simplest questions.

We tend to ignore the high probability of small gains or losses and focus on big payoffs or disaster despite remote odds.

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

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

If you see voters as rational, you'll be a terrible politician. People are not wired to be rational. Our brains simply evolved to keep us alive. Brains did not evolve to give us truth. Brains merely give us movies in our minds that keeps us sane and motivated. But none of it is rational or true, except maybe sometimes by coincidence.

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.

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.