Meta-Rational Choice

Abstract

The principal result of this article relates to several foundational problems in the economic conception of the rational actor. It proves that for any possible decision-maker, there necessarily exists a real-valued function such that every counterfactual choice that the decision-maker would make can be represented as maximizing that function. The formal framework constructed to prove this result resolves several persistent technical problems associated with earlier conceptions of rationality and establishes that for any set of possible behaviors, there necessarily exists a representation that characterizes that behavior as "utility-maximizing." Several implications and interpretations – both practical and philosophical – of the result are explored.

Keywords: behavioral economics, heuristics, biases, rationality, bounded rationality

JEL Classification: D01, D03