Rationality (Economics)

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Rationality has a special meaning in economics, having to do with ideal models of human thinking that generally do not match what humans are actually capable of and are known to do. Humans use other methods instead: see Actual Human Rationality.

Links

Libertarianism is an Ideology Built on Neoclassical Economics [More...]
"One of the things that has always put me off libertarianism is that it clearly has neoclassical economics at its heart. The only difference is that all of the flaws – assumptions, rational economic man, framing issues as governments versus markets – are transposed onto a political ideology."
Nudge Policies [More...]
"Once you have admitted that people's decisions are affected by these kinds of factors, an obvious question is whether public policy might make use of how decisions are presented to influence behavior."
Nudge: Improving Decisions About Health, Wealth, and Happiness (book) (1 link)
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Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions (book)
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Quantum Epistemology for Business [More...]
Decision making based on any data has problems analogous to those of Quantum Mechanics. These make pretenses to "rationality" heuristic at best.
Rationality: A Second-Best Theorem [More...]
"To see what's going on here, remember Lancaster and Lipsey's theory of the second best. They show that if there is a market imperfection welfare might be improved by introducing another imperfection. For example, if there is a monopoly, price controls might be welfare-enhancing."

Quotations

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