Top 60 Richard Thaler Quotes

As a general rule, the United States government is run by lawyers who occasionally take advice from economists. Others interested in helping the lawyers out need not apply.

God did not say that you should be able to borrow one hundred percent of the price of a house.

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

The more we turn down questionable offers like trip insurance and scrutinize ‘one month’ trials, the less incentive companies will have to use such schemes.

Tort reform is a complicated subject and not a panacea.

Many Americans say they want to be organ donors, but they just don’t get around to acting on their intentions. Helping these potential good Samaritans overcome their inertia could prolong thousands of lives a year.

Doctors and hospitals should be paid for keeping their patients well. Paying them for doing more tests and surgeries creates bad incentives.

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

Lotteries are just one way to provide positive reinforcement. Their power comes from the fact that the chance of winning the prize is overvalued.

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.

We all need a lot of humility, and especially about the economy.

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

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.

If there is one thing that most economists agree about in the realm of tax policy, it is that it’s best to broaden the base of any tax, all else being equal. That means minimizing the number of deductions and exclusions from taxable income in order to lower marginal rates and reduce distortions.

We should at least make sure that patients are given the opportunity to opt out of spending their final days in a hospital, hooked up to tubes and running up enormous bills.

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.

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.

For many people, being asked to solve their own retirement savings problems is like being asked to build their own cars.

Countries all around the world, starting with the U.K., have started behavioural insight teams, often referred to as nudge units. And they seem to be doing lots of good.

Tax cuts are one of many ways to stimulate the economy. Building infrastructure, for example, is another.

When employees are first eligible for a retirement savings plan, they should be enrolled unless they choose to opt out.

If you’re not putting enough away for emergencies or retirement, making commitments in advance, such as signing up for payroll withholding, can help.

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

The good thing I will say about the Chicago School is that it was always about the world, not about the abstract.

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

Behavioral economics offers a plausible explanation for overreactions by the market. For example, a long period of bad performance can lead to stereotyping.

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

As every successful parent learns, one way to encourage good behavior, from room-cleaning to tooth-brushing, is to make it fun. Not surprisingly, the same principle applies to adults. Adults like to have fun, too.

It’s essential that we understand things like the free-rider problem, but we also need to understand that, fortunately, humans are a little nicer than economists give them credit for. Some people actually leave money at roadside fruit stands; some people give money to NPR so we can listen to it.

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

We humans actually need help controlling our impulses – nudges.

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.

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

Whenever I’m asked to autograph a copy of ‘Nudge,’ the book I wrote with Cass Sunstein, the Harvard law professor, I sign it, ‘Nudge for good.’ Unfortunately, that is meant as a plea, not an expectation.

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

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.

The wealth in many large estates has never been taxed because it is largely in the form of unrealized – therefore untaxed – capital gains.

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

Real people have trouble balancing their checkbooks, much less calculating how much they need to save for retirement; they sometimes binge on food, drink, or high-definition televisions. They are more like Homer Simpson than Mr. Spock.

If you’re trading individual securities, you’re almost certainly making a mistake. Because most professional managers can’t outperform their benchmarks, and there’s little reason to think that individuals can.

Signing up to be an organ donor should be at least as easy as downloading a song to your iPhone.

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.

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.

I practice what has come to be called behavioral economics.

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

When it comes to my health, I would rather my doctor base her decisions on science rather than what she, or some lawyer, thinks will stand up in court.

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 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.

It is true that I am one of the co-authors of ‘Nudge,’ and I am a behavioral economist, but it does not mean that everything we write about in that book is behavioral economics, nor does it mean that my co-author, the distinguished legal scholar Cass Sunstein, is a behavioral economist.

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

In the 1940s, economics started getting highly mathematical. It was basically because economists weren’t smart enough to write down models of real behavior that they started writing down models of highly rational behavior – and they kind of forgot about humans.

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.

Many problems are so complex that even if we had the money to fix them, we wouldn’t know how to do it. Fixing inner-city schools, reducing obesity, creating peace in the Middle East are just a few examples.

Sunk costs? We pay too much attention to them.

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.

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.

A nudge is some feature of the environment that changes the behaviour of humans but would not change the behaviour of rational economic agents, what we call Econs.