Rationality in Economics: Theory and Evidence
26 Pages Posted: 21 Mar 2018
Date Written: February 12, 2018
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: Suggested Citation