Download This PaperThe Rationality of Irrationality
19 Pages Posted: 18 Jun 2009 Last revised: 24 Jan 2012
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The Rationality of Irrationality
Number of pages: 19
Posted: 18 Jun 2009
Last Revised: 24 Jan 2012
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The Rationality of Irrationality
Number of pages: 19
Posted: 02 Jul 2008
Last Revised: 24 Apr 2012
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Date Written: June 14, 2009
Abstract
The bounded rationality assumption does not contradict the rationality assumption. Specifically, in small decisions it is rational to act like boundedly rational agents. This proposition may provide answers to many challenges to rational choice economic theory that are posed by behavioral economics. In particular, it provides an answer to the "Rabin paradox", and challenges our understanding of how to refute the rationality assumption.
Keywords: rationality, bounded rationality, mistake, computation cost
Suggested Citation: Suggested Citation
Weiss, Uri, The Rationality of Irrationality (June 14, 2009). Available at SSRN: https://ssrn.com/abstract=1419445 or http://dx.doi.org/10.2139/ssrn.1419445
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