Rationality in Economics: Theory and Evidence

Dhami, Sanjit; al-Nowaihi, Ali

doi:10.2139/ssrn.3144302

Download This Paper

Open PDF in Browser

Add Paper to My Library

Rationality in Economics: Theory and Evidence

CESifo Working Paper Series No. 6872

26 Pages Posted: 21 Mar 2018

See all articles by Sanjit Dhami

Ali al-Nowaihi

University of Leicester - Department of Economics

Date Written: February 12, 2018

Abstract

We examine the various senses in which economist use the term “rationality” and then outline some of the commonly drawn implications and auxiliary assumptions. Finally, we confront the implications with the empirical evidence, drawing on the insights from the exciting new field of behavioral economics.

Keywords: rationality, self-regarding preferences, efficient markets, heuristics, optimization

JEL Classification: B400

Suggested Citation: Suggested Citation

Dhami, Sanjit and al-Nowaihi, Ali, Rationality in Economics: Theory and Evidence (February 12, 2018). CESifo Working Paper Series No. 6872, Available at SSRN: https://ssrn.com/abstract=3144302 or http://dx.doi.org/10.2139/ssrn.3144302