Richard Thaler

Economist

1945-09-12

Quotes by Richard Thaler

• 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.'

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• 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.

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

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• Sunk costs? We pay too much attention to them.

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• 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.

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

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• Arthur Laffer's idea, that lowering taxes could increase revenues, was logically correct. If tax rates are high enough, then people will go to such lengths to avoid them that cutting taxes can increase revenues. What he was wrong about was in thinking that income tax rates were already so high in the 1970s that cutting them would raise revenues.

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• 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.

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