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Richard Thaler Biography

Richard H. Thaler (/ˈθeɪlər/; born September 12, 1945) is an American economist and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. In 2015, Thaler was president of the American Economic Association.

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Richard Thaler Quotes

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.

Correlated, Interested, Long, Should Have, Years

The money has to be deferred with what they call "clawback," which means they can get it back if I lose it all. So that guy making ten million a year selling credit default swaps, if we're going to keep five million of it in escrow for ten years, and with the right to go back and get it, if he starts losing money, then we're going to give people the right incentives not too take so much risk.

Default, Escrow, Give, Mean, People, Years

There's a second component of a good savings plan, which is something that a colleague of mine called Schlomo Benartzi and I developed many years ago, that we call "save more tomorrow. "

Call, Component, Saving, Tomorrow, Years

Credit cards have been extremely profitable to banks. They're profitable not from the fees they collect from the retailers that use the credit cards, that pays the bills, but the real profits come from the interest payments and the charges to users that are unexpected.

Cards, Collect, Come, Real, Use

Is there a market for somebody selling a credit card that helps people pay down their balances? I think the question is yes. But it would have to be sold by a bank that's really willing to invest in being a trusted partner with its consumers, because they will make less money on each consumer.

Balance, Consumer, People, Somebody, Thinking, Willing

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.

People, Recall, Recalls, Right, Think, Thinking

So the world is much more correlated than we give credit to. And so we see more of what Nassim Taleb calls "black swan events" - rare events happen more often than they should because the world is more correlated.

Black, Credit, Giving, Rare, Rare Events, Swans

There's no reason to think that markets always drive people to what's good for them.

Markets, People, Reason, Think, Thinking

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.

Drunk, Law, Nudge, Shoves, Think, Thinking

Maybe you'll take the cash out. So a credit card company or a bank that goes into the business of saying we're going to be the broker, we're going to sell you a mortgage that you're going to be able to pay off, we're going to help you reduce your credit card debt, we're going to help you save for retirement, we're going to put you into mutual funds that have low fees rather than high fees.

Able, Broker, Business, Cards, Debt, Retirement

Most people start claiming benefits within a year of when they become eligible, although benefits increase substantially if they wait.

Claiming, People, Start, Waiting, Years

I think we also have learned the lesson that we have to have better incentive structures.

Incentives, Lesson, Lessons, Structures, Think, 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.

Ability, Rating, Taste, Tastes, Wine

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.

Balance, Debt, Long, Pay, People, Raise

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.

Car, Difference, Differences, Keep, Mind, Pay

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.

Amount, Eligible, Forms, Saving, Typical, Want

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

Data, Evidence, Mean, Mixed, Opposites, Theory

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

Economist, Insurance, Longevity, People, Sense

Everyone's lost a lot of money on their 401k plans. I've heard some people calling them 201k plans. So it's even more important to get people to be saving more for retirement. Behavioral economics has helped us learn a lot about how to do that.

401K, Important, People, Retirement, Saving

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?

Card, Consumer, Friendly, Over You, Would Be

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