Jeremy Grantham Quotes

We do not always act the way economists think we should, mainly because we're both less selfish and less rational than economists think we are. Economists are being indoctrinated into a cardboard version of human nature, which they hold true to such a degree that their own behavior has begun to resemble it.

Personally, I don't see old economics and behavioural economics as opposed. It is useful to assume people are rational as a good approximation to their long term behaviour, but it would be unwise not to think how in practice their behaviour may deviate from that simplifying assumption.

There is much evidence that people are not rational, in the economist’s sense; nor do they take into account expectation, in the precise interpretation of that word. As a result, economic theory often does not correspond with what happens in the market. Some would argue that we need descriptive economics. I would argue that all should be taught about probability, utility, and MEU (maximization of expected utility) and act accordingly.

Economists think about what people ought to do. Psychologists watch what they actually do.

It is true that from a behavioral economics perspective we are fallible, easily confused, not that smart, and often irrational. We are more like Homer Simpson than Superman. So from this perspective it is rather depressing. But at the same time there is also a silver lining. There are free lunches!

I can calculate the movement of the stars, but not the madness of men.

In considering economic behavior, humor is especially important for, needless to say, much of that behavior is infinitely ridiculous.

That's the world we live in: when it comes to economics, people have emotions; it's not like chemistry or physics.

The lesson of my field, behavioral economics, is that we need to understand the ways in which we differ from the rational human assumed in standard economic theory.

The notion of humans as inherently rational beings has been not only trashed in economics, but trashed in all the best research on moral decision-making.

Economics is counterintuitive. It just is.

Modern economics is a set of formal models and equations purporting to fully determine human behaviour, at least in the economic realm. And there is no way that uncertainty can be compressed into determinate mathematical models.

Who should know better than a cosmetician that human beings are less than rational creatures?

How should the best parts of psychology and economics interrelate in an enlightened economist's mind?... I think that these behavioral economics...or economists are probably the ones that are bending them in the correct direction. I don't think it's going to be that hard to bend economics a little to accommodate what's right in psychology.

The great thing about behavioural psychology and economics is that they help us to see that there are actually pretty good reasons why human beings swing from greed to fear, and why we're not really calculating machines or utility-maximisers.

Economics is not a discipline that comes to correct answers - economies are too complex.

To say that man is a reasoning animal is a very different thing than to say that most of man's decisions are based on his rational process. That I don't believe at all.

For all their expertise at figuring out how things work, technical people are often painfully aware how much of human behavior is a mystery. People do things for unfathomable reasons. They are opaque even to themselves.

Economists, firstly, regard only one part of man's nature, and treat him simply as a money-making animal; secondly, they disregard the influence of custom, and only take account of competition.

Economists discount any factors that would not influence the thinking of a rational person.

Traditional economics is based on imaginary creatures sometimes referred to as 'Homo economicus.' I call them Econs for short. Econs are amazingly smart and are free of emotion, distraction or self-control problems. Think Mr. Spock from 'Star Trek.'

I love Richard Thaler's 'Quasi Rational Economics.' A collection of some of his most interesting and inventive essays, the real foundation of behavioral economics.

You meet people, and you're like, 'I don't know how I feel about you,' and someone does something surprising that changes your mind. We're interesting creatures; we're nuanced, complicated and layered, and we make all sorts of choices.

Humans are hard-wired to be irrational when it comes to financial decisions. We must understand that so we don't become the sucker at the poker table.

Human behavior is messy and unpredictable and unconcerned with convenient symmetries.