Richard Thaler Quotes

Why tie to gold? Why not 1982 Bordeaux?

It would be much more consumer friendly for them to beep you when you swipe your card that says, uh-oh you’re over your limit, are you sure you want to use that?

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.

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.

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.

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

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.

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

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.

One simple step firms can take is make sure that people that are getting paid a lot of money, say more than a million or two, that a big chunk of that money is deferred. That’s going to change the whole ballgame.

Every American worker should be able to save for retirement via payroll deductions.

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.