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How much does human nature influence investment decisions?

01 August, 2019Osy Plummer

Are mathematical algorithms enough to base investment decisions on? And to what extent does human nature get in the way?

Hand holding phone with data on it and computer in background

In this faculty paper, Osy Plummer looks back on the rise of mathematical algorithms in finance and economics, and explores the relationship between rational actions and emotional impulses.

Maths, human nature and investment banking: Are we economists or human beings?

Since this paper was first published, Osy Plummer spoke to our CEO, Alex Fraser, about how rational actions and emotional impulses affect investment decisions. They discuss how both algorithms and human nature may have impacted the banking crisis of 2008 and whether there is also a cultural influence.

Listen to the podcast: "Are we economists or human beings?"

About the author

Osmond-Plummer-LIBF-Faculty

Osy is a Visiting Professor of Finance at the EU Business School in Geneva and Montreux. He has worked in the banking industry for over 20 years in a range of international postings, including the Bank of New York, Intermaritime Bank in Geneva and postings with Lloyds in Dubai, Hong Kong and Guernsey.