The concept of loss aversion is certainly the most significant contribution of psychology to behavioral economics.

Knowing the importance of luck, you should be particularly suspicious when highly consistent patterns emerge from the comparison of successful and less successful firms. In the presence of randomness, regular patterns can only be mirages.

The illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the [investment management] industry.

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.

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.

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.

We are prone to overestimate how much we understand about the world and to underestimate the role of chance in events.