Thaler And Thaler Quotes & Sayings

When an economist says the evidence is "mixed," he or she means that theory says one thing and data says the opposite. — Richard Thaler

If rather than setting the minimum balance as the lowest possible amount, so we keep people in debt for as long as possible, we raise the minimum payment and encourage people to pay off their credit cards, we're going to make less money, but we're going to have costumers that are more solvent. — Richard Thaler

A bat and ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost? _ cents If it takes 5 machines 5 minutes to make 5 widgets, how long would it take 100 machines to make 100 widgets? _ minutes In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake? _ days — Richard H. Thaler

And [Thaler] noticed that when he had his fellow economists to dinner, they filled up on cashews, which meant they had less appetite for the meal. More to the point, he noticed that they tended to be relieved when he removed the cashew nuts, so they didn't ruin their dinners. "The idea that it could make you better off to reduce your choices - that idea was alien to economics. — Michael Lewis

The money has to be deferred with what they call "clawback," which means they can get it back if I lose it all. So that guy making ten million a year selling credit default swaps, if we're going to keep five million of it in escrow for ten years, and with the right to go back and get it, if he starts losing money, then we're going to give people the right incentives not too take so much risk. — Richard Thaler

Or consider this one: people's judgments about strangers are affected by whether they are drinking iced coffee or hot coffee! Those given iced coffee are more likely to see other people as more selfish, less sociable, and, well, colder than those who are given hot coffee.27 This, too, happens quite unconsciously. — Richard H. Thaler

In a typical 401k plan, when you first become eligible you get a big pile of forms and you're told, fill out these forms if you want to join. Tell us how much amount you've saved and how you want to invest the money. In, under automatic enrollment you get that same pile of forms but the top page says, if you don't fill out these forms, we're going to enroll you anyway and we're going to enroll you at this saving rate and in these investments. — Richard Thaler

track, each one mile long, laid end to end (see figure 1). The tracks are nailed down at their end points but simply meet in the middle. Now, suppose it gets hot and the railroad tracks expand, each by one inch. Since they are attached to the ground at the end points, the tracks can only expand by rising like a drawbridge. Furthermore, these pieces of track are so sturdy that they retain their straight, linear shape as they go up. (This is to make the problem easier, so stop complaining about unrealistic assumptions.) Here is your problem: Consider just one side of the track. We have a right triangle with a base of one mile, a hypotenuse of one mile plus one inch. What is the altitude? In other words, by how much does the track rise above the ground? — Richard H. Thaler

PROBLEM 1. Assume yourself richer by $300 than you are today. You are offered a choice between A. A sure gain of $100, or [72%] B. A 50% chance to gain $200 and a 50% chance to lose $0. [28%] PROBLEM 2. Assume yourself richer by $500 than you are today. You are offered a choice between A. A sure loss of $100, or [36%] B. A 50% chance to lose $200 and a 50% chance to lose $0. — Richard H. Thaler

So, we experience life in terms of changes, we feel diminishing sensitivity to both gains and losses, and losses sting more than equivalently-sized gains feel good. — Richard H. Thaler

It is time to stop making excuses. We need an enriched approach to doing economic research, one that acknowledges the existence and relevance of Humans. — Richard H. Thaler

Thinking, Fast and Slow, mentioned above, and Dan Ariely's Predictably Irrational. One of the handful of books that provides advice on making decisions better is Nudge by Richard Thaler and Cass Sunstein, which was written for "choice architects" in business and government who construct decision systems such as retirement plans or organ-donation policies. It has been used to improve government policies in the United States, Great Britain, and other countries. — Chip Heath

There is a new wave of interest in exploring how to frame choices so that people make better decisions. Richard Thaler and Cass Sunstein, professors of economics and law, respectively, teamed up to write Nudge: Improving Decisions About Health, Wealth, and Happiness, which advocates using defaults to nudge us to make better choices.9 Even when we are choosing in our own interests, we often choose unwisely. When employees have the option of participating in a retirement-savings scheme, many do not, despite the financial advantages of doing so. If their employer instead automatically enrolls them, giving them the choice of opting out, participation jumps dramatically — Peter Singer

The first is that seemingly small features of social situations can have massive effects on people's behavior; nudges are everywhere, even if we do not see them. Choice architecture, both good and bad, is pervasive and unavoidable, and it greatly affects our decisions. The second claim is that libertarian paternalism is not an oxymoron. Choice architects can preserve freedom of choice while also nudging people in directions that will improve their lives. — Richard H. Thaler

By properly deploying both incentives and nudges, we can improve our ability to improve people's lives, and help solve many of society's major problems. And we can do so while still insisting on everyone's freedom to choose. — Richard H. Thaler

We don't have to stop inventing abstract models that describe the behavior of imaginary Econs. We do, however, have to stop assuming that those models are accurate descriptions of behavior, and stop basing policy decisions on such flawed analyses. — Richard H. Thaler

As I have learned over the years, and will discuss further in subsequent chapters, the reluctance to experiment, test, evaluate, and learn that I experienced at General Motors is all too common. — Richard H. Thaler

GRIT is Guts, Resilience, Industriousness and Tenacity. GRIT is the ability to focus, stay determined, stay optimistic in the face of a challenge, and simply work harder than the next guy or gal. — Linda Kaplan Thaler

there is no question that social pressures nudge people to accept some pretty odd conclusions - and those conclusions might well affect their behavior. — Richard H. Thaler

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

So the world is much more correlated than we give credit to. And so we see more of what Nassim Taleb calls "black swan events" - rare events happen more often than they should because the world is more correlated. — Richard Thaler

There's a second component of a good savings plan, which is something that a colleague of mine called Schlomo Benartzi and I developed many years ago, that we call "save more tomorrow." — Richard Thaler

You buy a pair of shoes that turn out to be uncomfortable. Thaler suggests the expensive they were, the more often you'll try to wear them. Eventually you'll stop wearing them, but you won't get rid of them. And the more you paid for them the longer they will sit in your closet. At some point, after the shoes have been fully depreciated psychologically, you will throw them away. — Barry Schwartz

You have to treat everyone you meet as if they are the most important person in the world - because they are. If not to you, then to someone; and if not today, then perhaps tomorrow. — Linda Kaplan Thaler

Investors must keep in mind that there's a difference between a good company and a good stock. After all, you can buy a good car but pay too much for it. — Richard Thaler

People exaggerate their own skills. they are optimistic about their prospects and overconfident about their guesses, including which managers to pick. — Richard Thaler

The assumption that everybody will figure out how much they have to save and then will just implement that plan is obviously preposterous. — Richard Thaler

individual risk taking, especially in the domain of risks to life and health. — Richard H. Thaler

Psychologists tell us that in order to learn from experience, two ingredients are necessary: frequent practice and immediate feedback. — Richard H. Thaler

My present post amounts to about 700 thaler, and when there are rather more funerals than usual, the fees rise in proportion; but when a healthy wind blows, they fall accordingly ... — Johann Sebastian Bach

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

People worry that if they buy an annuity and then die before the policy starts to pay off, their heirs will lose out. I tell them, "What you should be more worried about is if you outlive your money, you will have to move in with your kids. Ask your kids which of these outcomes they are more worried about." — Richard Thaler

I'm all for empowerment and education, but the empirical evidence is that it doesn't work. That's why I say make it easy. — Richard Thaler

Credit cards have been extremely profitable to banks. They're profitable not from the fees they collect from the retailers that use the credit cards, that pays the bills, but the real profits come from the interest payments and the charges to users that are unexpected. — Richard Thaler

There are cases when I can make myself better off by restricting my future choices and commit myself to a specific course of action. — Richard Thaler

I found the concept of hindsight bias fascinating, and incredibly important to management. One of the toughest problems a CEO faces is convincing managers that they should take on risky projects if the expected gains are high enough. Their managers worry, for good reason, that if the project works out badly, the manager who championed the project will be blamed whether or not the decision was a good one at the time. Hindsight bias greatly exacerbates this problem, because the CEO will wrongly think that whatever was the cause of the failure, it should have been anticipated in advance. And, with the benefit of hindsight, he always knew this project was a poor risk. What makes the bias particularly pernicious is that we all recognize this bias in others but not in ourselves. — Richard H. Thaler

Trayless cafeterias. Cafeteria managers have been taking a keen interest in reducing food waste. Seeing how easy it is to load up a tray with extra food that often goes uneaten and extra napkins that go unused, curious managers and students at Alfred University in New York tested a trayless policy over two days. When trays weren't offered, food and beverage waste dropped between 30 and 50 percent! — Richard H. Thaler

The three social influences that we have emphasized - information, peer pressure, and priming - can easily be enlisted by private and public nudgers. As we will see, both business and governments can use the power of social influence to promote many good (and bad) causes. — Richard H. Thaler

Toward 1175 rich veins of copper, silver, and gold were found in the Erz Gebirge (i.e., ore mountains); Freiberg, Goslar, and Annaberg became the centers of a medieval "gold rush"; and from the little town of Joachimsthal came the word joachimsthaler - meaning coins mined there - and, by inevitable shortening, the German and English words thaler and dollar. — Will Durant

Rip Van Winkle would be the ideal stock market investor: Rip could invest in the market before his nap and when he woke up 20 years later, he'd be happy. He would have been asleep through all the ups and downs in between. But few investors resemble Mr. Van Winkle. The more often an investor counts his money - or looks at the value of his mutual funds in the newspaper - the lower his risk tolerance. — Richard Thaler

Hundreds of studies confirm that human forecasts are flawed and biased. Human decision making is not so great either. Again to take just one example, consider what is called the "status quo bias," a fancy name for inertia. For a host of reasons, which we shall explore, people have a strong tendency to go along with the status quo or default option. — Richard H. Thaler

Doctors are crucial choice architects, and with an understanding of how Humans think, they could do far more to improve people's health and thus to lengthen their lives. — Richard H. Thaler

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. — Richard Thaler

So, what's a nudge? A nudge is some small feature of the environment that attracts our attention and alters our behavior. — Richard Thaler

Self-control problems can be illuminated by thinking about an individual as containing two semiautonomous selves, a far-sighted "Planner" and a myopic "Doer." You can think of the Planner as speaking for your Reflective System, or the Mr. Spock lurking within you, and the Doer as heavily influenced by the Automatic System, or everyone's Homer Simpson. The Planner is trying to promote your long-term welfare but must cope with the feelings, mischief, and strong will of the Doer, who is exposed to the temptations that come with arousal. Recent research in neuroeconomics (yes, there really is such a field) has found evidence consistent with this two-system conception of self-control. Some parts of the brain get tempted, and other parts are prepared to enable us to resist temptation by assessing how we should react to the temptation.1 Sometimes the two parts of the brain can be in severe conflict - a kind of battle that one or the other is bound to lose. — Richard H. Thaler

LTCM lost money when Russia defaulted on a certain class of bonds, and then they had other investments like on the spread between two different kinds of shares of Royal Dutch Shell Oil Company. Now that seems completely unrelated to Russian bonds. But they were related because other hedge funds saw similar discrepancies and they were all making similar bets. — Richard Thaler

14. Procrastinator's Clock. For those who are chronically late to meetings, there's the Procrastinator's Clock, a downloadable program for your computer, that displays a digital clock that is guaranteed to be up to fifteen minutes fast. How fast? Well, that's the nudge. You are never exactly sure because the clock unpredictably speeds up and slows down. That assures that users can't game the system. We think that this device might help the lawyer of this team (who shall remain nameless) get to Noodles on time for lunch. A physical version of this clock has already been patented by a company called Emergent Technologies. — Richard H. Thaler

Our principal claim here is that patients and doctors should be free to make their own agreements about that right. If patients want to waive the right to sue, they should be allowed to do exactly that. This increase in freedom is likely to help doctors and patients alike, and to make a valuable, even if modest, contribution to the health care problem. — Richard H. Thaler