Quotes About Behavioral economics

In Danny and Amos's working theory, the paradox was now resolved differently. It wasn't that (or at least not only that) people anticipated regret when making a decision in the first situation that they did not anticipate in making the second. It was that they treated 50 percent as more than 50 percent and saw the difference between 4 percent and 2 percent as far less than it was.

Here was one of the predictions that economists made that Edwards thought psychologists might test: Are actual human beings transitive? If at any given moment they preferred coffee to tea and tea to hot chocolate, did they prefer coffee to hot chocolate? A few people had recently looked into the matter, Edwards noted, among them a mathematician named Kenneth May. Writing in a leading economics journal, Econometrica

There's a very good reason for why economics developed the way it did, and that is that in many situations, the assumption that people will exploit the opportunities available to them is very plausible, and it simplifies the analysis of how markets will behave.

Uno de los hallazgos claros de la economía conductual experimental es que las personas son mucho más sensibles a las pérdidas que a las ganancias.

Traditional economics is based on imaginary creatures sometimes referred to as 'Homo economicus.' I call them Econs for short. Econs are amazingly smart and are free of emotion, distraction or self-control problems. Think Mr. Spock from 'Star Trek.'

In reality, though, most of the time we don't choose the best option—we choose the first reasonable option, a strategy known as satisficing.

Two behavioral economists, Terrance Odean and Brad Barber, examined the individual accounts at a large discount broker over a substantial period of time. They found that the more individual investors traded, the worse they did. And male investors traded much more than women, with correspondingly poorer results.

As our emerging self-portrait makes clear, we are motivated by far more than cost and price. So instead of turning first to markets to mediate our social and ecological relationships, the twenty-first-century economist would be wise to start by asking what social dynamics are already in play. What are the values, heuristics, norms and networks that currently shape human behaviour—and how could they be nurtured or nudged, rather than ignored and eroded?

Nudge policies, in essence, can be used to encourage us to mimic the way that we would behave if we were as rational as economic man.

Free" is a special price, and there has been all sorts of psychological research showing that people don't act rationally around it. We overestimate the value of free. We consume more of something than we should when it's free. We pressure others to consume it. Free warps our normal sense of cost vs. benefit, and people end up trading their personal data for less than its worth.

YOU ARE THE SPENDER

There's a popular image of people who don't save for the future as lacking in self-control. But the reason saving is so hard has less to do with self-control and more to do with a scarcity of attention.

Regression effects, in other words, serve to "punish the administration of reward, and to reward the administration of punishment."21

Kahneman and Tversky concluded that losses were 2½ times as undesirable as equivalent gains were desirable. In other words, a dollar loss is 2½ times as painful as a dollar gain is pleasurable. People exhibit extreme loss aversion, even though a change of $100 of wealth would hardly be noticed for most people with substantial assets. We'll see later how loss aversion leads many investors to make costly mistakes.

Like fingers pointing to the moon, other diverse disciplines from anthropology to education, behavioral economics to family counseling, similarly suggest that the skillful management of attention is the sine qua non of the good life and the key to improving virtually every aspect of your experience.

Like fingers pointing to the moon, other diverse disciplines from anthropology to education, behavioral economics to family counseling, similarly suggest that the skillful management of attention is the sine qua non of the good life and the key to improving virtually every aspect of your experience. This

she was witness to a "grand unified theory" of the mind: Like fingers pointing to the moon, other diverse disciplines from anthropology to education, behavioral economics to family counseling, similarly suggest that the skillful management of attention is the sine qua non of the good life and the key to improving virtually every aspect of your experience.

This anchoring to a number is the reason people do not react to their total accumulated wealth, but to differences of wealth from whatever number they are currently anchored to. This is the major conflict with economic theory, as according to economists, someone with $1 million in the bank would be more satisfied than if he had half a million. But

have some element of loss aversion.

We are, after all, homo economicus .

Kahneman, Nobel laureate and one of the fathers of behavioral economics, calls overconfidence "the most significant of the cognitive biases.

La economía tiene que ver con la decisión de Yang Li.

the pain of losing a dollar is far more powerful than the pleasure of winning a dollar.

'Fun money' is another thing that makes no sense to traditional economists. Because there's just money; there's no 'fun money.' It's all supposed to be the same.