Top 142 Quotes & Sayings by Richard Thaler - Page 2

The ability of businesses to monitor our behavior is already a fact of life, and it isn't going away. Of course we must protect our privacy rights. But if we're smart, we'll also use the data that is being collected to improve our own lives.

In some ways, the finding that financial education doesn't provide long-term payoffs is hardly surprising. After all, how much do you remember from your high school chemistry class? Unless you use chemistry at work, you probably don't recall much about ionic bonding.

It makes sense for social scientists to become more involved in policy because many of society's most challenging problems are, in essence, behavioral.

Here is a guiding principle: If a business collects data on consumers electronically, it should provide them with a version of that data that is easy to download and export to another Web site.

High school seniors should receive help in how to think about a student loan and how to make sure that the education bought with the loan offers good prospects for repayment.

Even a mother - Jewish or not - can't worry about everything. So it is important that we limit our worries to real as opposed to imaginary risks.

Parents want their children to excel, callers to a victims' hot line want help, and sick people want to get well. Offering aids is like providing an alarm clock: it may help people get to an appointment on time, but no one is forcing them to use it.

Even if we grade on a very generous curve, many Americans flunk when it comes to financial literacy.

When it comes to assessing the chances of some complicated combination of events, gut feelings are pretty much useless.

I don't think it says anywhere in the Bible that tithing should be calculated on a before-tax basis.

If the government can manage to collect and release personal information in a secure and useful way, so can private companies, which will empower consumers to become better shoppers.

One reason for high health care costs is that patients fail to follow their treatment regimen.

I am all for trying to teach household finance in schools, starting as early as possible. And when it comes to high school, I think learning about compound interest is at least as important as trigonometry or memorizing the names of all 50 state capitals.

For amateur golfers, I think one of the biggest mistakes is to model their play on professionals.

Arthur Laffer's idea, that lowering taxes could increase revenues, was logically correct. If tax rates are high enough, then people will go to such lengths to avoid them that cutting taxes can increase revenues. What he was wrong about was in thinking that income tax rates were already so high in the 1970s that cutting them would raise revenues.

Companies are accumulating vast amounts of information about your likes and dislikes. But they are doing this not only because you're interesting. The more they know, the more money they can make.

Shopping for an annuity with hundreds of thousands of dollars at stake can be daunting, even for an economist.

You can't make evidence-based policy decisions without evidence.

You go out on the practice range, and something kind of clicks, and you start hitting the ball very crisply. And you're sure that you've found it, the holy grail - that all you have to do is hold your hand in a certain way. Then you go out on the golf course, and it's completely disappeared.

The lesson for businesses is you are dealing with real people. Those are your customers, those are your employees, those are your bosses, and the better you understand how real people tick, the more successfully you will be able to accomplish your goals.

How can government reduce the frequency and the severity of future catastrophes? Companies that have the potential to create significant harm must be required to pay for the costs they inflict, either before or after the fact. Economists agree on this general approach. The problem is in putting such a policy into effect.

People make just as many mistakes when the stakes go up, maybe more.

If you want to encourage some activity, make it easy.

If no estate tax is imposed, capital gains taxes can be avoided indefinitely.

Academia does not provide many opportunities for immediate gratification. You work for two years on a project, it takes two more years to get it published, and then you start hoping someone might read it.

There's a reason why start-ups, especially disruptive start-ups - like Google or Amazon or Uber - are full of young people. That's because young people are not as wedded to the old fashioned ways of doing things.

One of society's thorniest problems is that children from poor families start school lagging badly behind their more affluent classmates in readiness.

Morality aside, there are other factors deterring 'strategic defaults,' whether in recourse or nonrecourse states. These include the economic and emotional costs of giving up one's home and moving, the perceived social stigma of defaulting, and a serious hit to a borrower's credit rating.

The voting public is not very good at attributing credit and blame to presidents. They get too much credit when things go well and too much blame when things go badly. The same applies to coaches, C.E.O.'s, parents, and anyone else in charge.

Although the United States cannot unilaterally lower the price of oil, it can reduce its consumption by using oil more efficiently and by developing alternative sources of fuel.

The government employs scientists of many varieties in technical capacities, from estimating the environmental toxicity of a chemical to the structural soundness of a bridge. But when it comes to forming policies, these scientists and, especially, behavioral scientists are rarely at the table with the lawyers and the economists.

Demanding that the rich get a tax cut as a condition for tax relief for others is simply elitist.

Most of us think that we are 'better than average' in most things. We are also 'miscalibrated,' meaning that our sense of the probability of events doesn't line up with reality. When we say we are sure about a certain fact, for example, we may well be right only half the time.

If governments want to encourage good citizenship, they should try making the desired behavior more fun.

Coining a term is not the same as creating a field!

I have an agent, John Brockman, who is an agent to many academic authors like Dan Gilbert and Steven Pinker, and he's very good at conning academics into writing books. He pulled this trick on me.

If we think that high marginal tax rates are bad because they distort incentives, the same is then true for tax subsidies.

It's hard to have any idea of how much money is enough to finance an appropriate lifestyle in retirement. But if a lump sum is translated into a monthly income, it's much easier to determine whether you have enough put away to afford to stop working.

People are less likely to think it's immoral to walk away from their home if they know others who have done so. And if enough people do it, the stigma begins to erode.

There's no reason to think that markets always drive people to what's good for them.

I don't go by the ratings. I buy wine that tastes good. Statistically, anybody's ability to predict what will be a good wine a decade from now is limited.

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

Most economists, including me, agree that longevity insurance would make sense for a lot of people.

I think the people who've been the most overconfident in our business in the last decade have been the people that called themselves risk managers.

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

My mantra is if you want to help people accomplish some goal, make it easy.

A good rule of thumb is to assume that everything matters.

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.

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."

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

Recall that people like to do what most people think it is right to do; recall too that people like to do what most people actually do.

I think one lesson we have to learn is that there's a lot more risk than we're giving credit to, a lot more what economist calls systematic risk.

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

If people just put away what's left at the end of the month, that's a recipe for failure.

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.

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.

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

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.

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.

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