Rational choice and the framing of decisions

Article Abstract:

Theories of decision making under risk have been derived from analyses of games of chance, using normative models of logical decision makers. These theories assume that people pursue goals in a rational manner, and that competition favors the rational decision maker. Despite these a priori arguments, however, experimental results show that behavioral deviations from the normative model have been so widespread and so systematic that the logic of choice does not accurately describe decision making. The premises of rational choice are analyzed, and are shown to be frequently violated under actual conditions. It is concluded that no theory of choice can be both descriptively and normatively accurate.

Psychological aspects, Decision-making, Decision making, Choice (Psychology)

---

Fairness and the assumptions of economics

Article Abstract:

Economists have traditionally held the view that fairness is irrelevant to economic theory. This assumption is called into question. It is argued that models which account for the rules of fairness are not only realistic but may also help to explain certain anomalous market phenomena. Certain economic incentives exist for acting fairly, since the public in general will punish those perceived as unfair; in the case of corporations, such punishment takes the form of reductions in trade.

Analysis, Economic aspects, Ethical aspects, Fairness

---

Comments on Arrow and on Lucas

Article Abstract:

The research papers by Robert Lucas on adaptive behavior and economic theory and Kenneth Arrow on rationality in economic systems are discussed. Lucas puts forth what is called the 'Classic Defense' of the paradigm of rational optimization. The limitations and inconsistencies of this theory are discussed, and a case is made for expanding economic inquiry into the areas of adaptive behavior.

Methods, Economic methods

Similar abstracts:

• Abstracts: Board composition and the commission of illegal acts: an investigation of Fortune 500 companies. Directors' characteristics and committee membership: an investigation of type, occupation, tenure, and gender
• Abstracts: Effects of organizational formalization on alienation among professionals and nonprofessionals
• Abstracts: Effects of organizational formalization on alienation among professionals and nonprofessionals. part 2 Does isomorphism legitimate?
• Abstracts: Competition and two-part tariffs. The effects of regulation on research and development: theory and evidence. Rate of return regulation with price flexibility

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.