Mainstream economists everywhere exhibit an ‘irrational passion for dispassionate rationality.’ Behavioral economists, and long-time critic of mainstream economics suggests that people in mainstrean economic models ‘can think like Albert Einstein, store as much memory as IBM’s Big Blue, and exercise the will power of Mahatma Gandhi, ‘ suggesting that such a view of real world modern homo sapiens is simply wrongheaded. Indeed, Thaler and other behavioral economists and psychology have documented a variety of ways in which real-world people fall far short of mainstream economists’ idealized economic actor, perfectly rational homo economicus. Behavioral economist Daniel Ariely has concluded that real-world people not only exhibit an array of decision-making frailties and biases, they are ‘predictably irrational, ‘ a position now shared by so many behavioral economists, psychologists, sociologists, and evolutionary biologists that a defense of the core rationality premise of modedrn economics is demanded.
Table of Content
Economists’ “Irrational Passion for Dispassionate Rationality”.- The Methodological Constraints on the Rationality Premise.- Human Motivation and Adam Smith’s “Invisible Hands”.- Rationality in Economic Thought: From Thomas Robert Malthus to Alfred Marshall and Philip Wicksteed.- Rationality in Economic Thought: Frank Knight, Ludwig von Mises, Friedrich Hayek, and James Buchanan.- Behavioral Economists, and Psychologists’ Challenges to Rational Behavior.- The Evolutionary Biology of Rational Behavior.- The Neuroeconomics of Rational Decision Making.- Economic Defenses for Rational Behavior in Economics.- Problems with Behavioral Economics.- Rationality and Economic Education.
About the author
Richard Mc Kenzie is the Walter B. Gerken Professor of Enterprise and Society in the Paul Merage School of Business at the University of California, Irvine. Widely published in academic journals and general audience publications, his two most recent books are In Defense of Monopoly: How Market Power Fosters Creative Production (University of Michigan Press, 2008) and Why Popcorn Costs so Much at the Movies, And Other Pricing Puzzles (Springer, 2008) (www.merage.uci.edu/~mckenzie)
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