The Weak Rationality Principle in Economics

25 Pages Posted: 16 Dec 2004

See all articles by Gebhard Kirchgässner

Gebhard Kirchgässner

Universität St. Gallen; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: February 2005

Abstract

The weak rationality principle is not an empirical statement but a heuristic rule of how to proceed in social sciences. It is a necessary ingredient of any "understanding" social science in the Weberian sense. In this paper, first this principle and its role in economic theorizing is discussed. It is also explained why it makes sense to use a micro-foundation and, therefore, employ the rationality assumption in economic models. Then, with reference to the "bounded rationality" approach, the informational assumptions are discussed. Third, we address the assumption of self-interest which is often seen as a part of the rationality assumption. We conclude with some remarks on handling the problems of "free will" as well as "weakness of the will" within the economic approach.

Keywords: Rationality, Self Interest, Micro-Foundation, Bounded Rationality

JEL Classification: B41

Suggested Citation

Kirchgaessner, Gebhard, The Weak Rationality Principle in Economics (February 2005). Available at SSRN: https://ssrn.com/abstract=632981 or http://dx.doi.org/10.2139/ssrn.632981

Gebhard Kirchgaessner (Contact Author)

Universität St. Gallen ( email )

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CH-9000 St.Gallen
Switzerland
+41 71 224 23 47 (Phone)
+41 71 224 22 98 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

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