Vernon L. Smith

"I can switch out and go into a concentrated mode and the world is completely shut out. If Im writing something, nothing else exists... Perhaps even more importantly, I dont have any trouble thinking outside the box. I dont feel any social pressure to do things the way other people are doing them, professionally. And so I have been more open to different ways of looking at a lot of the problems in economics."

"In defining a microeconomic system two distinct component elements will be identified: an environment and an institution. The environment consists of a list of N economic agents {l,...,N}, a list of K + 1 commodities (including resources) {O,l,...,K}, and certain characteristics of each agent … Hence, a microeconomic environment is defined by the collection of characteristics e = (e,...,e”)."

"Economics as currently learned and taught in graduate school and practiced afterward is more theory-intensive and less observation-intensive than perhaps any other science. I think the statement that "no mere fact ever was a match in economics for a consistent theory" accurately describes the prevailing attitude in the profession (Milgrom and Roberts, 1987, p. 185)."

"When the theory performs well you also think, “Are there parallel results in naturally occurring field data?” You look for coherence across different data sets because theories are not specific to particular data sources. Such extensions are important because theories often make specific assumptions about information and institutions which can be controlled in the laboratory, but which may not accurately represent field data generating situations. Testing theories on the domain of their assumptions is sterile unless it is part of a research program concerned with extending the domain of applications of theory to field environments"

"In economics the tendency of theory to lag behind observation seems to be endemic, and, as theorists, few of us consider this to be a "terrible state." But as noted by Lakatos (1978, p. 6), "where theory lags behind the facts, we are dealing with miserable degenerating research programmes."

"Rules emerge as a spontaneous order–they are found–not deliberately designed by one calculating mind. Initially constructivist institutions undergo evolutionary change adapting beyond the circumstances that gave them birth. What emerges is a form of “social mind” that solves complex organization problems without conscious cognition."

"Ecological rationality uses reason – rational reconstruction – to examine the behavior of individuals based on their experience and folk knowledge, who are ‘naïve’ in their ability to apply constructivist tools to the decisions they make; to understand the emergent order in human cultures; to discover the possible intelligence embodied in the rules, norms and institutions of our cultural and biological heritage that are created from human interactions but not by deliberate human design. People follow rules without being able to articulate them, but they can be discovered."

"The vast majority of individuals with Asperger Syndrome need help — without that help they wont be able to do very well. The individuals that I know have to overcome a great deal of difficulty to maximize their potential and get the things in life they deserve."

"I think its different kinds of minds, and the recognition that certain mental deficiencies may actually have some selective advantages in terms of activities. Weve lost a lot of the barriers that have to do with skin color and with various other characteristics. But theres still not sufficient recognition of mental diversities. And we dont all have to think alike to be communal and to live in a productive and satisfying world."

"Nonsatiation (Smith, 1976a). Given a costless choice be ween two alternatives which differ only in that the first yields more of the reward medium (e.g., currency) than the second, the first will always be chosen (preferred) over the second by an autonomous individual, i.e., utility U(M) is a monotone increasing function of the reward medium."

"Parallelism: Propositions about the behavior of individuals and the performance of institutions that have been tested in laboratory microeconomies apply also to nonlaboratory environments where similar ceteris paribus conditions prevail."

"One of the most intriguing discoveries of experimental economics is that (1) as we have seen, people invariably behave non-cooperatively in small and large group ‘impersonal’ market exchange institutions; (2) many (up to half in single play; over 90% in repeat play) cooperate in ‘personal’ exchange (two-person extensive form games); (3) yet in both economic environments all interactions are between anonymous players."