Prospect Theory Quotes

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

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.

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.

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

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.

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.

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.

[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.

Interestingly, human irrationality is a hot topic in economics at the moment. Behavioural economics it's called, on the cusp of economics and psychology.

No one likes to have less than they had before. That's the nature of the human animal.

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 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.

We behavioralists differ from our more traditional brethren in the way we characterize agents in the economy.

Most people, even in simple risky situations, don't behave the way the theory of utility would have them behave.

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.

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.

Human decision-making is complex. On our own, our tendency to yield to short-term temptations, and even to addictions, may be too strong for our rational, long-term planning.