Overview
- Offers the first defense of the continued use of "perfect rationality" in microeconomics – in spite of the broadbased criticisms from behavioral economics and psychology that people are not rational
- The author argues that because the behavioralists have demonstrated people many irrationalities, economists would be well advised to continue to use the standard rationality premise
- Includes supplementary material: sn.pub/extras
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Table of contents (11 chapters)
Keywords
About this book
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.
Reviews
From the reviews:
One reviewer (Nobel Laureate in Economics) described the book as a "massise effort," because of the breadth of the inquiry, covering from the intellectual history of the rationality premise (from Adam Smith to modern economists) to the evolutionary biology of the concept to the neurobiology/economics of the concept to the behavioral economics/psychology of the criticisms.
“McKenzie (Univ. of California, Irvine) defends homo economicus, the perfectly rational maximizer of self-interest, assumed in Chicago-style economics as the conceptual basis of efficient markets, rational expectations, and the efficacy of free market capitalism. … Summing Up: Recommended. Upper-division undergraduate through faculty and research collections.” (R. S. Hewett, Choice, Vol. 47 (11), July, 2010)
Authors and Affiliations
About the author
Richard McKenzie 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)
Bibliographic Information
Book Title: Predictably Rational?
Book Subtitle: In Search of Defenses for Rational Behavior in Economics
Authors: Richard B. McKenzie
DOI: https://doi.org/10.1007/978-3-642-01586-1
Publisher: Springer Berlin, Heidelberg
eBook Packages: Business and Economics, Economics and Finance (R0)
Copyright Information: Springer-Verlag Berlin Heidelberg 2010
Softcover ISBN: 978-3-642-01585-4Published: 23 November 2009
eBook ISBN: 978-3-642-01586-1Published: 21 October 2009
Edition Number: 1
Number of Pages: XXII, 308
Number of Illustrations: 1 b/w illustrations
Topics: Economic Theory/Quantitative Economics/Mathematical Methods, Economics, general, History of Economic Thought/Methodology