It's nonsense to say money doesn't buy happiness, but people exaggerate the extent to which more money can buy more happiness.
There's a very good reason for why economics developed the way it did, and that is that in many situations, the assumption that people will exploit the opportunities available to them is very plausible, and it simplifies the analysis of how markets will behave.
Although professionals are able to extract a considerable amount of wealth from amateurs, few stock pickers, if any, have the skill needed to beat the market consistently, year after year.
The planning fallacy is that you make a plan, which is usually a best-case scenario. Then you assume that the outcome will follow your plan, even when you should know better.
Except for some effects that I attribute mostly to age, my intuitive thinking is just as prone to overconfidence, extreme predictions, and the planning fallacy as it was before I made a study of these issues.
I'm not a great believer in self-help.
After a crisis we tell ourselves we understand why it happened and maintain the illusion that the world is understandable. In fact, we should accept the world is incomprehensible much of the time.
Most successful pundits are selected for being opinionated, because it's interesting, and the penalties for incorrect predictions are negligible. You can make predictions, and a year later people won't remember them.
It's very easy for trusted companies to mislead naive customers, and life insurance companies are trusted.
Through some combination of culture and biology, our minds are intuitively receptive to religion.
The average investor's return is significantly lower than market indices due primarily to market timing.
If you think in terms of major losses, because losses loom much larger than gains - that's a very well-established finding - you tend to be very risk-averse. When you think in terms of wealth, you tend to be much less risk-averse.
Policy makers, like most people, normally feel that they already know all the psychology and all the sociology they are likely to need for their decisions. I don't think they are right, but that's the way it is.
Employers who violate rules of fairness are punished by reduced productivity, and merchants who follow unfair pricing policies can expect to lose sales.
It doesn't take many observations to think you've spotted a trend, and it's probably not a trend at all.
We're generally overconfident in our opinions and our impressions and judgments.
Political columnists and sports pundits are rewarded for being overconfident.
Friends are sometimes a big help when they share your feelings. In the context of decisions, the friends who will serve you best are those who understand your feelings but are not overly impressed by them.
All of us roughly know what memory is. I mean, memory is sort of the storage of the past. It's the storage of our personal experiences. It's a very big deal.
People who know math understand what other mortals understand, but other mortals do not understand them. This asymmetry gives them a presumption of superior ability.
