Kenneth Arrow Quotes

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

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.

We accept that people are irrational for good Darwinian reasons. But I don't think we should be so pessimistic as to think that therefore we're forever condemned to be irrational.

Most people are reasonable. That's why they only do reasonably well.

Most people, even in simple risky situations, don't behave the way the theory of utility would have them behave.

Economists who adhere to rational-expectations models of the world will never admit it, but a lot of what happens in markets is driven by pure stupidity - or, rather, inattention, misinformation about fundamentals, and an exaggerated focus on currently circulating stories.

To predict the behavior of ordinary people in advance, you only have to assume that they will always try to escape a disagreeable situation with the smallest possible expenditure of intelligence.

People are irrational. What I want to do is let's take the irrational aspects out of it and let's just break this down. And you and I, let's go and see if we can't master this thing, a few steps at a time without giving up your day job, without having to give up your whole life.

Even if this advice to portfolio decision makers to drop dead is good advice, it obviously is not counsel that will be eagerly followed. Few people will commit suicide without a push. And fewer still will pay good money to be told to do what is against human nature and self-interest to do.

Some people throw a bit of their personality after their bad arguments, as if that might straighten their paths and turn them into right and good arguments-just as a man in a bowling alley, after he has let go of the ball, still tries to direct it with gestures.

Simply having rules does not change the things that people want to do. You have to change incentive.

Some people get rich studying artificial intelligence. Me, I make money studying natural stupidity.

I had no choice. Love does funny things to people.

"Akrasia" [weakness of will] in rational beings is as common as wine in France.

People in this world are not often logical.

People will do odd things if you give them money.

Behavioral economics can explain some things, but it's hard to explain a lot of the underlying processes that generate these decisions, much less some of these unconscious things that we don't have a handle on at all.

The world of rumors and gossip is a world of wish fulfillment. And one of the things that gives volume and amplitude to a rumor is that it satisfies people's dreams and expectations about the world...

I don't know where people get the idea that every Wilco record is supposed to have drama. OK, I guess historically speaking we've had our fair share of ups and downs.

People are funny. They want the front of the bus, the middle of the road and the back of the church. —Mrs. Miracle

Economists sometimes do try to reduce behavior to law-like predictability. But people respond differently to different primes, to different contexts even from one moment to the next. We possess multiple selves that are aroused by different circumstances.

So, throughout life, our worst weaknesses and meannesses are usually committed for the sake of the people whom we most despise.

My clinical psychologist wife of 40 years has always had a close intellectual influence on me. When I was beginning to talk openly in the economics profession about irrationality in decision-making, I received a lot of criticism. Ginny would support my views and remind me that a whole other profession - psychology - studies people's irrational sides.

This idea that people have to love and understand each other is absurd. It's not human nature.

Investing in a market where people believe in efficiency is like playing bridge with someone who has been told it doesn't do any good to look at the cards.