Abstract

http://ssrn.com/abstract=1692441
 
 

References (372)



 
 

Citations (1)



 


 



Rational After All: Toward an Improved Theory of Rationality in Economics


Yulie Foka-Kavalieraki


University of Athens – Department of Philosophy & History of Science

Aristides N. Hatzis


University of Athens - Department of Philosophy & History of Science; University of Athens - Faculty of Law; Athens University of Economics and Business - Department of Economics

May 3, 2011

Revue de Philosophie Economique, Vol. 12, No. 1, June 2011

Abstract:     
In this paper we critically review the literature on rational choice theory (RCT) and the critical approaches to it. We will present a concise description of the theory as defended by Gary Becker, Richard Posner and James Coleman (as well as others) at the University of Chicago from the mid-1970s to the early 1990s, we will discuss its epistemological assumptions and predictions and we will also examine the most important arguments against it. We will give our main emphasis on the critique coming from behavioral economics and we will try to see if humans’ supposed cognitive constraints lead to a failure of rationality or if they constitute rational responses to the scarcity of information, time and energy. In our discussion we will use findings from experimental economics and the sciences of the brain, especially evolutionary psychology and neuroeconomics. Our intention is to present an improved theory of rational choice that, informed from the above discussion, will be descriptively more accurate but without losing its predicting power. Moreover, we will conclude by trying to answer the most important related policy question: when rationality seems to fail, does this necessarily imply that agents should be paternalistically protected against themselves? We will briefly defend the thesis that, in the long-run, it is much better for them and the society at large for the individual decision makers to be let alone to develop rational responses to their cognitive constraints.

Number of Pages in PDF File: 49

Keywords: Rational Choice Theory, Behavioral Economics, Evolutionary Psychology, Rationality, Cognition, Paternalism

JEL Classification: A10, A12, D01, D03, B41, D81

Accepted Paper Series


Download This Paper

Date posted: October 15, 2010 ; Last revised: June 2, 2011

Suggested Citation

Foka-Kavalieraki, Yulie and Hatzis, Aristides N., Rational After All: Toward an Improved Theory of Rationality in Economics (May 3, 2011). Revue de Philosophie Economique, Vol. 12, No. 1, June 2011. Available at SSRN: http://ssrn.com/abstract=1692441

Contact Information

Yulie Foka-Kavalieraki
University of Athens – Department of Philosophy & History of Science ( email )
MITHE, University Campus
Ano Ilisia
Athens, 15771
Greece
+30-210-7275565 (Phone)
+30-210-7275530 (Fax)
HOME PAGE: http://www.phs.uoa.gr
Aristides N. Hatzis (Contact Author)
University of Athens - Department of Philosophy & History of Science ( email )
MITHE, University Campus
Ano Ilisia
Athens, 15771
Greece
+30 210 7275565 (Phone)
+30 210 7275530 (Fax)
HOME PAGE: http://www.phs.uoa.gr/ahatzis
University of Athens - Faculty of Law
Athens
Greece
Athens University of Economics and Business - Department of Economics ( email )
Athens
Greece
Feedback to SSRN


Paper statistics
Abstract Views: 3,463
Downloads: 1,180
Download Rank: 8,185
References:  372
Citations:  1
Paper comments
No comments have been made on this paper

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.359 seconds