When should we nudge and when should we shove, I think, it's a political judgment. Obviously in some situations we need shoves, we need laws. Fraud is against the law, murder is against the law, drunk-driving is against the law. We don't need just nudges.

Richard Thaler

Categorized in : Thinking Law Drunk

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

Richard Thaler

data opposites mean

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

Richard Thaler

goal want people

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

Richard Thaler

nudge environment attention

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

Richard Thaler

economics lessons people

There's no reason to think that

Richard Thaler

reason people thinking

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.

Richard Thaler

recalls people thinking

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

Richard Thaler

thumbs risk matter

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.

Richard Thaler

rip naps years

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."

Richard Thaler

kids people moving

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

Richard Thaler

optimistic skills people

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

Richard Thaler

recipes months people

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.

Richard Thaler

car differences mind

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.

Richard Thaler

risk giving thinking

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.

Richard Thaler

rating wine taste

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

Richard Thaler

cases choices action

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

Richard Thaler

assumption plans figures

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

Richard Thaler

longevity economist people

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.

Richard Thaler

empirical-evidence empowerment easy

The reason is they failed to learned the primary lesson we should have learned from when Long Term Capital Management went belly up ten years ago. That is, investments that seem uncorrelated can be correlated simply because we're interested in it.

Richard Thaler

should-have long years

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.

Richard Thaler

risk people thinking