The Rationality of Irrationality

19 Pages Posted: 2 Jul 2008 Last revised: 24 Apr 2012

See all articles by Uri Weiss

Uri Weiss

Polonsky Academy, Van Leer Jerusalem Institute

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Date Written: July 1, 2008

Abstract

The Bounded Rationality Assumption does not contradict The Rationality Assumption. Specifically, in small decisions it is rational to act like boundedly rational agents. The previous proposition may provide answers to many challenges of rational choice economic theory by behavioral economics. In particular, it provides an answer to the "Paradox of Rabin". This also challenges our understanding of how to refute the rationality assumption.

Keywords: Rationality, Bounded Rationality, Computation

Suggested Citation

Weiss, Uri, The Rationality of Irrationality (July 1, 2008). Available at SSRN: https://ssrn.com/abstract=1154050 or http://dx.doi.org/10.2139/ssrn.1154050

Uri Weiss (Contact Author)

Polonsky Academy, Van Leer Jerusalem Institute ( email )

Feldman Building
Givat-Ram
Jerusalem, 91904
Israel

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