THE RATIONAL IRRATIONALITY

Petko Miran

Abstract


One of the fundamental theories in Economics, namely the Rational Choice Theory, is seriously questioned these days. A lot of examples of irrational behavior have been provided, and a Nobel Prize was awarded for the achievements in the field. Yet, a careful scrutiny of these instances shows that, in most of the cases, the light of rationality shines through the observed irrational behavior. A hypothesis in the partial support of the Rational Choice Theory is proposed. It takes into account the subject’s understandings, attitude and information in describing a choice as rational or irrational. Therefore, one and the same activity could be considered as perfectly rational, as well as perfectly irrational at the same time.

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References


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Freedman, Jonathan L., and Scott C. Fraser, “Compliance Without Pressure: The Foot-In-The-Door Technique,” Journal of Personality and Social Psychology, 4(1966), 195–202.

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Thaler, Richard H., Misbehaving: The Making of Behavioral Economics, (New York, W. W. Norton & Company, 2015).


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