Quotes About Behavioral economics

people seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value.

They behave in accordance with what the contrast principle would suggest: Sell the suit first, because when it comes time to look at sweaters, even expensive ones, their prices will not seem as high in comparison.

The more income inequality, the less likely people are to help someone (in an experimental setting) and the less generous and cooperative they are in economic games.

It amazes me how people are often more willing to act based on little or no data than to use data that is a challenge to assemble.

There is no such thing as economics, only social science applied to economic problems.

Investment performance doesn't determine real-life returns; investor behavior does.

In the world of traditional economics, it shouldn't matter whether you use an opt-in or opt-out system. So long as the costs of registering as a donor or a nondonor are low, the results should be similar. But many findings of behavioral economics show that tiny disparities in such rules can make a big difference.

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.

Thinking Fast and Slow.

Homo economicus would cheat only if he stood to benefit by enough and if the odds of being caught were sufficiently low. So the mere fact that he does not have a reputation for being a cheat tells us only that he's been prudent.

Robert J. Shiller

Betting and gambling are suitable for discrete events but not for continuous processes. If you introduce the behavioral characteristics of betting or gambling into a continuous process, you are leaving yourself open to enormous losses.

And the effect is stronger the more the ticket costs. Imagine if, instead of $95, you had spent $150 or $250 or $500. As the price tag grows, so does the effect of sunk costs.

The endowment and sunk cost effects live together in a way that amplifies escalation of commitment. Status quo bias adds to the mix of cognitive forces gaffing the scale.

When we're choosing among new options, loss aversion causes us to favor the ones that have the lowest absolute loss associated with them, even if those options come at a lower expected value. In other words, our aversion to taking a loss causes us to make decisions a rational actor would not.

In a rising market, enough of your bad ideas will pay off so that you'll never learn that you should have fewer ideas.

It's widely accepted that it is reasonable for a government to use tax policy to change behaviour.

Psychologists and economists love to talk about the notion of two selves: present self and future self. It's a nice way to explain the tendency to have one preference about the future, but a very different preference when the future becomes the present.

I think one of the major results of the psychology of decision making is that people's attitudes and feelings about losses and gains are really not symmetric. So we really feel more pain when we lose $10,000 than we feel pleasure when we get $10,000.

In psychology and behavioral economics, people have shown that if you just describe options in a certain way, or make some features of a situation salient, you can get people to do and even see what you want. You don't have to be a Jedi to manipulate people's attention.

I've explained before the power psychology has on the markets.

Behavioral economists have shown that a sizable percentage of people are willing to pay real money to punish people who are taking from a common pot but not contributing to it. Just to insure that shirkers get what they deserve, we are prepared to make ourselves poorer.

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

Economics, when you strip away the guff and the mathematical sophistry, is largely about incentives.