Robert Aumann (2008) - Rule Rationality vs. Act Rationality

Robert Aumann (2008)

Rule Rationality vs. Act Rationality

Robert Aumann (2008)

Rule Rationality vs. Act Rationality

Abstract

The assumption of rationality -- that people act to maximize their utility, given their information -- is fundamental in economics. We suggest that the maximization need not be conscious, for each act separately. Rather, people develop rules that yield optimal outcomes usually, but not necessarily always. If one thinks of neoclassical economics as a thesis, and behavioral economics as its antithesis, then this may provide a synthesis.

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