Dan Ariely Quotes

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.'

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.

Economic theory does not work with human beings. We are far too messy.

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

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

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.

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.

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.

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.

To say that man is a reasoning animal is a very different thing than to say that most of man's decisions are based on his rational process. That I don't believe at all.

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.

Logic is one thing, the human animal another. You can quite easily propose a logical solution to something and at the same time hope in your heart of hearts it won't work out.

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.

The Enlightenment view of mankind is a complete myth. It leads us into thinking we're sane and rational creatures most of the time, and we're not.

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

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.

We do not always act the way economists think we should, mainly because we're both less selfish and less rational than economists think we are. Economists are being indoctrinated into a cardboard version of human nature, which they hold true to such a degree that their own behavior has begun to resemble it.

It's human nature to make the complex manageable and determine things that fit your conclusions. That's bias.

Sunk costs? We pay too much attention to them.

I practice what has come to be called 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.

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.