Rationality in Economics: Theory and Evidence

26 Pages Posted: 21 Mar 2018

See all articles by Sanjit Dhami

Sanjit Dhami

University of Leicester

Ali al-Nowaihi

University of Leicester - Department of Economics

Date Written: February 12, 2018

Abstract

We examine the various senses in which economist use the term “rationality” and then outline some of the commonly drawn implications and auxiliary assumptions. Finally, we confront the implications with the empirical evidence, drawing on the insights from the exciting new field of behavioral economics.

Keywords: rationality, self-regarding preferences, efficient markets, heuristics, optimization

JEL Classification: B400

Suggested Citation

Dhami, Sanjit and al-Nowaihi, Ali, Rationality in Economics: Theory and Evidence (February 12, 2018). CESifo Working Paper Series No. 6872, Available at SSRN: https://ssrn.com/abstract=3144302 or http://dx.doi.org/10.2139/ssrn.3144302

Sanjit Dhami (Contact Author)

University of Leicester ( email )

Department of Economics
Leicester LE1 7RH, Leicestershire LE1 7RH
United Kingdom

HOME PAGE: http://www2.le.ac.uk/departments/economics/people/sdhami

Ali Al-Nowaihi

University of Leicester - Department of Economics ( email )

Department of Economics
Leicester LE1 7RH, Leicestershire LE1 7RH
United Kingdom

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