Behavioral Economics Quotes

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

Sunk costs? We pay too much attention to them.

Never, ever, think about something else when you should be thinking about the power of incentives.

I think behavioral economists don't have any more of an explanation about the rise of Trump than anyone else.

Economics is (now) about emotion and psychology.

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

If you cannot control your emotions, you cannot control your money.

"Save more tomorrow" is a nudge to help people do what they know they want to do, which is save more, but they can't bring themselves to save more now. Just like many of us are planning to go on diets next month, or maybe in two months, certainly not tonight.

The typical American reports making about 70 [choices] in a typical day.

Berkshire was built on the eternal verities: basic mathematics, basic horse sense, basic fear, and basic diagnosis of human nature to make predictions regarding human behavior. We stuck to the basics with a certain amount of discipline and it has worked out quite well.

When should we nudge and when should we shove, I think, it's a political judgment. Obviously in some situations we need shoves, we need laws. Fraud is against the law, murder is against the law, drunk-driving is against the law. We don't need just nudges.

Experts are human, and humans respond to incentives. How any given expert treats you, therefore, will depend on how that expert's incentives are set up.

I would reject the distinction between a Keynesian moment and a behavioral moment.

Like everyone else, rich people respond to incentives.

Who should know better than a cosmetician that human beings are less than rational creatures?

What people CAN do is very different from what they WILL do.

I always believed in animal spirits. It's not their existence that is new. It's the fact that they are not random events, but actually replicate in-bred qualities of human nature which create those animal spirits.

Regulation is very much informed by behavioral economics.

Mimicking the herd invites regression to the mean.

An incentive is a bullet, a key: an often tiny object with astonishing power to change a situation

Action is the 'bridge' between the inner world and the outer world.

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.

I think time and time again, in reality, psychological notions and economic notions interplay, and the man who doesn't understand both is a damned fool.

How could economics not be behavioral? If it isn't behavioral, what the hell is it?

In the 1940s, economics started getting highly mathematical. It was basically because economists weren't smart enough to write down models of real behavior that they started writing down models of highly rational behavior - and they kind of forgot about humans.