The lesson for businesses is you are dealing with real people. Those are your customers, those are your employees, those are your bosses, and the better you understand how real people tick, the more successfully you will be able to accomplish your goals.
Interpretation
Understanding people is essential for business success.
This quote emphasizes the importance of recognizing the humanity in customers, employees, and bosses in a business environment. Richard Thaler suggests that by grasping what motivates and drives individuals, businesses can achieve their objectives more effectively, highlighting the role of empathy and interpersonal understanding in the corporate world.
In practice
During a business seminar, this quote can be used to emphasize the importance of customer relationships.
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.
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.
The goal is not to do business with everybody who needs what you have. The goal is to do business with people who believe what you believe.
A visionary company doesn't simply balance between idealism and profitability: it seeks to be highly idealistic and highly profitable. A visionary company doesn't simply balance between preserving a tightly held core ideology and stimulating vigorous change and movement; it does both to an extreme.
In a commodity business, it's very hard to be smarter than your dumbest competitor.
If one engineer at a startup tries Slack and says, 'I hate it. I am not going to use this,' that's it for us. We won't get evaluated.
In business, if you realize you've made a bad decision, you change it.
The buyer is entitled to a bargain. The seller is entitled to a profit. So there is a fine margin in between where the price is right. I have found this to be true to this day whether dealing in paper hats, winter underwear or hotels.
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