Quotes & Sayings About Behavioral Economics

Everyone's lost a lot of money on their 401k plans. I've heard some people calling them 201k plans. So it's even more important to get people to be saving more for retirement. Behavioral economics has helped us learn a lot about how to do that. — Richard Thaler

I started to read as obsessively about Star Wars as I once did about Kant - and still do about behavioral economics and behavioral psychology. — Cass Sunstein

People think about life in terms of changes, not levels. They can be changes from the status quo or changes from what was expected, but whatever form they take, it is changes that make us happy or miserable. — Richard H. Thaler

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

It is telling commentary on economic orthodoxy that a whole subdiscipline--behavioral economics--and a raft of lab experiments are needed to show that humans often fail to behave with the rationality expected of them. — Kaushik Basu

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

[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. — Kenneth E. Boulding

Wouldn't economics make a lot more sense if it were based on how people actually behave, instead of how they should behave? — Dan Ariely

The individual benefits as an individual from his ability to deny the truth even though society as a whole, of which he is a part, suffers. — Garrett Hardin

From this failure to expunge the microeconomic foundations of neoclassical economics from post-Great Depression theory arose the "microfoundations of macroeconomics" debate, which ultimately led to a model in which the economy is viewed as a single utility-maximizing individual blessed with perfect knowledge of the future.
Fortunately, behavioral economics provides the beginnings of an alternative vision of how individuals operate in a market environment, while multi-agent modelling and network theory give us foundations for understanding group dynamics in a complex society. These approaches explicitly emphasize what neoclassical economics has evaded: that aggregation of heterogeneous individuals results in emergent properties of the group, which cannot be reduced to the behavior of any "representative individual." These approaches should replace neoclassical microeconomics completely. — Steve Keen

January is always a good month for behavioral economics: Few things illustrate self-control as vividly as New Year's resolutions. February is even better, though, because it lets us study why so many of those resolutions are broken. — Sendhil Mullainathan

If we all make systematic mistakes in our decisions, then why not develop new strategies, tools, and methods to help us make better decisions and improve our overall well-being? That's exactly the meaning of free lunches- the idea that there are tools, methods, and policies that can help all of us make better decisions and as a consequence achieve what we desire-pg. 241 — Dan Ariely

When all economists are equally open-minded and are willing to incorporate important variables in their work, even if the rational model says those variables are supposedly irrelevant, the field of behavioral economics will disappear. All economics will be as behavioral as it needs to be. And those who have been stubbornly clinging to an imaginary world that consists only of Econs will be waving a white flag, rather than an invisible hand. — Richard H. Thaler

Neoclassical economics has effectively insulated itself from the great advances made in science and engineering over the last 40 years. This self-imposed isolation must come to an end. For while the concepts of neoclassical economics appear difficult, they are actually quaint in comparison to the sophistication evident in today's mathematics, engineering, computing, evolutionary biology and physics. In order to advance, economics must humbly submit to learning from disciplines that it has studiously ignored for so long. Some researchers in outside fields have called for the wholesale replacement of standard economics curricula, using at least the building blocks of modern thought inherent in other disciplines. — Steve Keen

Two Awesome Hours in the Morning After identifying your MIT, you need to turn it into a calendar item and book it as early in your day as possible. Dan Ariely, a Duke University professor of psychology and behavioral economics, suggests that most people are most productive and have the highest cognitive functioning in the first two hours after they're fully awake. In a Reditt Ask Me Anything, Ariely wrote: One of the saddest mistakes in time management is the propensity of people to spend the two most productive hours of their day on things that don't require high cognitive capacity (like social media). If we could salvage those precious hours, most of us would be much more successful in accomplishing what we truly want. — Kevin Kruse

One of the big lessons from behavioral economics is that we make decisions as a function of the environment that we're in. — Dan Ariely

There is ample evidence that confirmation bias permeates throughout investors' decisions. For example, once an investor likes a stock, he is likely to seek out information that validates that stock. In a 2010 study, researchers showed that investors used message boards to seek out information that validated rather than challenged, stocks they owned (Park et al. 2010). If we own a stock, we tend to look for anything that validates our decision to buy it, and to reinforce why we should keep holding it. — Peter Mallouk

Behavioral economics is about working constructively with the standard economic model to get a better understanding of economic behavior. The objective is definitely not to criticize the standard economic model, or accentuate the negatives. Testing the standard model is a means to an end, and that end is to understand economic behavior as best we can. — Edward Cartwright

Dan Ariely, author of Predictably Irrational, a book that offers an entertaining and engaging overview of behavioral economics. — Daniel H. Pink

Standard economics assumes that we are rational ... But, as the results presented in this book (and others) show, we are far less rational in our decision making ... Our irrational behaviors arevneither random nor senseless- they are systematic and predictable. We all make the same types of mistakes over and over, because of he basic wiring of our brains.-pg. 239 — Dan Ariely

But, as the results presented in this book (and others) show, we are all far less rational in our decision making than standard economic theory assumes. Our irrational behaviors are neither random nor senseless-they are systematic and predictable. We all make the same types of mistakes over and over, because of the basic wiring of our brains. So wouldn't it make sense to modify standard economics and move away from naive psychology, which often fails the tests of reason, introspection, and-most important-empirical scrutiny?

Wouldn't economics make a lot more sense if it were based on how people actually behave, instead of how they should behave? As I said in the Introduction, that simple idea is the basis of behavioral economics, an emerging field focused on the (quite intrusive) idea that people do not always behave rationally and that they often make mistakes in their decisions. — Dan Ariely

Retirement savings is probably behavioral economists' greatest success story. It is a prototypical behavioral-economics problem because saving for retirement is cognitively hard - figuring out how much to save - and requires self-control. — Richard Thaler

The lesson from behavioral economics is that people only save if it's automatic. — Richard Thaler

One of the peculiarities of economics is that it still rests on a behavioral assumption-rational utility maximization-that has long since been rejected by sociologists and psychologists. — Lester Thurow

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! — Dan Ariely

How should the best parts of psychology and economics interrelate in an enlightened economist's mind? ... I think that these behavioral economics ... or economists are probably the ones that are bending them in the correct direction. I don't think it's going to be that hard to bend economics a little to accommodate what's right in psychology. — Charlie Munger

Rather than be fearful and sell out at the worst time or get greedy when the market is way up, investors should control their emotions and not only avoid panic, but embrace the market volatility for what it is: an opportunity and a gift. Suffocate the instincts that want to make you a bad investor and rather embrace the chaos that normally causes them to rise to the surface. — Peter Mallouk

On traditional economic theory:
We do not play chess as if we were a grandmaster, invest as if we were Warren Buffett, or cook like an Iron Chef. It is more likely we cook like Warren Buffett, who loves to eat at Dairy Queen. — Richard H. Thaler

Behavioral economics tells us that people often focus too much on the wrong things, and tend to focus on aspects of the job that are salient. So, for example, the pay is salient, especially the starting pay. — Alan Krueger