In the world of traditional economics, it shouldn't matter whether you use an opt-in or opt-out system. So long as the costs of registering as a donor or a nondonor are low, the results should be similar. But many findings of behavioral economics show that tiny disparities in such rules can make a big difference.
Interpretation
Small changes in decision-making processes can significantly affect outcomes in economics.
This quote by Richard Thaler highlights the importance of behavioral economics in understanding how seemingly minor differences in choices can lead to vastly different results. It suggests that traditional economic theories might overlook the impact of human behavior and decision-making frameworks, where even slight changes can have major implications, particularly in areas like organ donation systems.
In practice
A presenter discussing the importance of system design in nudging people towards positive choices.
The ability of businesses to monitor our behavior is already a fact of life, and it isn't going away. Of course we must protect our privacy rights. But if we're smart, we'll also use the data that is being collected to improve our own lives.
If you're trading individual securities, you're almost certainly making a mistake. Because most professional managers can't outperform their benchmarks, and there's little reason to think that individuals can.
When an economist says the evidence is "mixed," he or she means that theory says one thing and data says the opposite.
In the 1940s, economics started getting highly mathematical. It was basically because economists weren't smart enough to write down models of real behavior that they started writing down models of highly rational behavior - and they kind of forgot about humans.
Academia does not provide many opportunities for immediate gratification. You work for two years on a project, it takes two more years to get it published, and then you start hoping someone might read it.
My thesis topic was 'The value of a human life.' I asked people a question: 'Suppose you had some risk, a one in a thousand risk of dying - how much would you pay to eliminate it?'
We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
The true law of economics is chance, and we learned people arbitrarily seize on a few moments and establish them as laws.
How very popular to say, 'spend more on this, expend more on that.' And of course, we all have our favorite causes; I know I do. But someone has to add up the figures. Every business has to do it, every housewife has to do it, [and] every government should do it.
If you paid Americans a living wage, they would be able to pay for products made by Americans in America.
If you go back to the really long-run questions that interested me, the big question was why, over the centuries, the millennia, has growth been speeding up?
Let me put it very forcefully: No large economy has ever recovered from an economic downturn through austerity. It's not going to happen in the United States, and it's not going to happen in Europe.
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