Richard Thaler Quotes

I practice what has come to be called behavioral economics.

As an economist, I'm aware that life is full of trade offs.

The economist rarely examines the presuppositions of the models with which he works. The economist simply commences with individuals as evaluating, choosing, and acting units. This starting point for analysis necessarily draws attention to the choice or decision environment for the individuals who must make selections from among the alternatives.

It is true that from a behavioral economics perspective we are fallible, easily confused, not that smart, and often irrational. We are more like Homer Simpson than Superman. So from this perspective it is rather depressing. But at the same time there is also a silver lining. There are free lunches!

Economics is everywhere, and understanding economics can help you make better decisions and lead a happier life.

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

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.'

About the only useful thing my economics degree taught me was that, in all decisions in life, you have to do a cost-benefit analysis.

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

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

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'.

The marginal cost of doing something 'just this once' always seems to be negligible, but the full cost will typically be much higher. Yet unconsciously, we will naturally employ the marginal-cost doctrine in our personal lives.

Because economics is all about optimising, doing the best you can with what you have - it's usually the first place you should look for answers if you want to maximise your happiness.

Economics is not about goods and services; it is about human choice and action.

Economics is a choice between alternatives all the time. Those are the trade-offs.

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.

The tradition of Chicago price theory is a good one, and it is a low-tech methodology that tries to apply simple economic theory to the world.

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.

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.

Economists are economical, among other things, of ideas; most make those of their graduate days do for a lifetime.

Anyway that's a large part of what economics is - people arbitrarily, or as a matter of taste, assigning numerical values to non-numerical things. And then pretending that they haven't just made the numbers up, which they have. Economics is like astrology in that sense, except that economics serves to justify the current power structure, and so it has a lot of fervent believers among the powerful

When people think of the outcomes of their decisions, they think much more short term than that. They think in terms of gains and losses.

Intelligent people make decisions based on opportunity costs.

Understanding economics can help you make better decisions and lead a happier life.

Since those don’t hit financial reports, the opportunities you had but didn’t accept, most people don’t bother thinking about them very much. At least that is a mistake we don’t make. We rub our own noses in our mistakes in blowing opportunities, as we just did.