The Ubiquity of Habits and Rules

Abstract

Under what circumstances is it necessary or convenient for an agent to rely on habits and rules? This paper focuses on the types of decision situation giving rise to their use. Even optimisation requires the development of rules, and for this reason mainstream economics cannot legitimately ignore these questions. It argues that habits and rules are ubiquitous in human activity, presents a new taxonomy and analyses seven types of decision situations classified according to the type of information problem involved. Neither neoclassical nor behavioural economics can provide a complete account of the bases of habits or rules in these cases.

Note: The Downloadable document is in Spanish

Keywords: habits, rules, learning, communication, cognition, uncertainty

JEL Classification: D81, D83, D84