Heuristics Quotes

We’re not used to calculating large amounts of data. Our brains think anecdotally.

One of the interesting applications of symbolic systems is artificial intelligence, and I spent some time thinking about how to create a brain that operates the way ours does.

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.'

This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.

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 trouble is that what we colloquially call “intuition” carries no label telling you where it came from. It can be based on expertise built over years. But sometimes it’s a cognitive bias. And sometimes it’s just fear.

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.

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

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

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.

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

Cognitive psychology tells us that the unaided human mind is vulnerable to many fallacies and illusions because of its reliance on its memory for vivid anecdotes rather than systematic statistics.

People who face a difficult question often answer an easier one instead, without realizing it.

In all our perceptions, from vision to hearing, to the pictures we build of people's character, our unconscious mind starts from whatever objective data is available to us - usually spotty - and helps to shape and construct the more complete picture we consciously perceive.

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

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.

I practice what has come to be called behavioral economics.

In order to be truly intelligent, computers must understand - that is probably the critical word.

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.

It's the way the human brain works: when enough events occur in a pattern, we stop thinking and go into macro mode.

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.

It is so hard to make important decisions that we have a great urge to reduce them to rules.

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.

What is the good of drawing conclusions from experience? I don't deny we sometimes draw the right conclusions, but don't we just as often draw the wrong ones?

It's actually very surprising how little we think about the quality of our decision-making and how we could improve it. How absent decision-making classes are from educational curricula. How little we think about how it is we think.