Society

, Volume 51, Issue 4, pp 393–400 | Cite as

Treating Rationality as a Continuous Variable

Symposium: The Achievement of Amitai Etzioni

Abstract

Granted, Behavioral Economics has demonstrated that “people” (implying all) are unable to act as strong definitions of rationality assume. Their cognitive limitations are “hard wired”. However Behavioral Economics’ own data show that important segments of the population find “the” rational answer to choices posed to them. How do these findings square with the thesis that limitations are hard wired and universal? And, more attention should be paid to the extent to which various people deviate from the rational choice, and—whether training can improve performance despite the claim that flaws are hard wired.

Keywords

Behavioral economics Rationality Training Methodology 

Further Reading

  1. Begley, C. G. & Ellis, L. M. 2012. Drug development: Raise standards for preclinical cancer research. Nature, 483, 531–533.Google Scholar
  2. Bishop, R. C. & Heberlein, T. A. 1979. Measuring Values of Extramarket Goods: Are Indirect Measures Biased? American Journal of Agricultural Economics, 61.5, 926–930.Google Scholar
  3. Cosmides, L., & Tooby, J. 1996. Are human beings good intuitive statisticians after all? Rethinking some conclusions from the literature on judgment under uncertainty. Cognition, 58(1), 1–73.CrossRefGoogle Scholar
  4. Darley, J. M., & Latané, B. 1968. Bystander Intervention in Emergencies: Diffusion of Responsibility. Journal of Personality and Social Psychology, 8(4), 377–383.CrossRefGoogle Scholar
  5. Davis, J. B. 2006. The turn in economics: neoclassical dominance to mainstream pluralism? Journal of Institutional Economics, 2(1), 1–21.CrossRefGoogle Scholar
  6. Fehr, E., & Schmidt, K. M. 1999. A Theory of Fairness, Competition, and Cooperation. Quarterly Journal of Economics, 114(3), 817–868.CrossRefGoogle Scholar
  7. Fontana, M. 2010. Can neoclassical economics handle complexity? The fallacy of the oil spot dynamic. Journal of Economic Behavior & Organization, 76(3), 584–596.CrossRefGoogle Scholar
  8. Forbes, D. P. 2005. Are some entrepreneurs more overconfident than others? Journal of Business Venturing, 20(5), 623–640.CrossRefGoogle Scholar
  9. Frick, B. 2010. How to Outsmart your Biases. Washington Post, September 25.Google Scholar
  10. Holden, S., Brady, P., & Hadley, M. 2006. 401(k) Plans: A 25-Year Retrospective. Investment Company Institute Research Perspective, 12(2), 1–40. Retrieved from http://www.ici.org/pdf/per12-02.pdf.Google Scholar
  11. Hursh, S. R., & Roma, P. G. 2013. Behavioral Economics and Empirical Public Policy. Journal of the Experimental Analysis of Behavior, 99(1), 98–124.Google Scholar
  12. Jolls, Christine, & Sunstein, Cass R. 2004. Debiasing Through Law. Working Paper. Retrieved from http://www.ftc.gov/be/seminardocs/04sunstein.pdf.
  13. Jolls, C., Sunstein, C., & Thaler, R. 1998. A Behavioral Approach to Law and Economics. Stanford Law Review, 50(5), 1471–1548.CrossRefGoogle Scholar
  14. Kahneman, D. 2003. Maps of Bounded Rationality: Psychology for Behavioral Economics. The American Economic Review, 93(5), 1449–1475.CrossRefGoogle Scholar
  15. Kahneman, D. 2011. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux. Daniel Kahneman, personal email to the author.Google Scholar
  16. Kahneman, Daniel. 2010. The riddle of experience vs. memory. Palm Springs, FL. Retrieved from http://www.ted.com/talks/daniel_kahneman_the_riddle_of_experience_vs_memory.html.
  17. Kaplan, J., & Du, J. 2009. Question Format and Representation: Do Heuristics and Biases Apply to Statistics Students? Statistics Education Research Journal, 8(2), 56–73.Google Scholar
  18. Korobkin, R. B., & Ulen, T. S. 2000. Law and Behavioral Science: Removing the Rationality Assumption from Law and Economics. California Law Review, 88(4), 1051–1144.CrossRefGoogle Scholar
  19. List, J. A. 2004. Neoclassical theory versus prospect theory: Evidence from the marketplace. Econometrica, 72(2), 615–625.CrossRefGoogle Scholar
  20. Loewenstein, G. F., Weber, E. U., Hsee, C. K., & Welch, N. 2001. Risk as Feelings. Psychological Bulletin, 127(2), 267–286.CrossRefGoogle Scholar
  21. Lord, C. G., Ross, L., & Lepper, M. R. 1979. Biased Assimilation and Attitude Polarization: The Effects of Prior Theories on Subsequently Considered Evidence. Journal of Personality and Social Psychology, 37(11), 2098–2109.CrossRefGoogle Scholar
  22. Madrian, B. C. & Shea, D. F. 2000. The Power of Suggestion: Inertia in 401 (K) Participation and Saving Behavior. National Bureau of Economic Research.Google Scholar
  23. Mueller, D. C. 2004. Models of man: neoclassical, behavioural, and evolutionary. Politics, Philosophy and Economics, 3(1), 59–76.CrossRefGoogle Scholar
  24. Nisbett, R. E., & Borgida, E. 1975. Attribution and the Psychology of Prediction. Journal of Personality and Social Psychology, 32(5), 932–943.CrossRefGoogle Scholar
  25. Pesendorfer, W. 2006. Behavioral Economics Comes of Age: A Review Essay on Advances in Behavioral Economics. Journal of Economic Literature, 44(3), 712–721.CrossRefGoogle Scholar
  26. Powell, T. C., Lovallo, D., & Fox, C. R. 2011. Behavioural Strategy. Strategic Management Journal, 32(13), 1369–1386.CrossRefGoogle Scholar
  27. Rabipour, S., & Raz, A. 2012. Training the brain: Fact and fad in cognitive and behavioural remediation. Brain and Cognition, 79(2), 159–179.CrossRefGoogle Scholar
  28. Ricciardi, V., & Simon, H. K. 2000. What is Behavioral Finance? Business, Education, and Technology Journal, 2(2), 1–9.Google Scholar
  29. Robinson, L. A., & Hammitt, J. K. 2011. Behavioral Economics and Regulatory Analysis. Risk Analysis, 31(9), 1408–1422.CrossRefGoogle Scholar
  30. Rockford, Marv, & Gray, Steve. 2012.How could they be so stupid? What were they thinking? The Business Journals. Retrieved from http://www.bizjournals.com/bizjournals/how-to/marketing/2012/11/how-could-they-be-so-stupid-what-were.html?page=all.
  31. Schmidt, K. M., & Fehr, E. 1999. A theory of fairness, competition, and cooperation. The Quarterly Journal of Economics, 114(3), 817–868.CrossRefGoogle Scholar
  32. Schwartz, H. 2008. A Guide to Behavioral Economics (pp. 998–999). Falls Church: Higher Education Publications.Google Scholar
  33. Seymour, B., & Dolan, R. 2008. Emotion, Decision Making, and the Amygdala. Neuron, 58(5), 662–671.CrossRefGoogle Scholar
  34. Spiegel, Alix. 2009.Using Psychology To Save You From Yourself. NPR. Retrieved from http://www.npr.org/templates/story/story.php?storyId=104803094.
  35. Stanovich, K. E., & West, R. F. 1998. Individual Differences in Rational Thought. Journal of Experimental Psychology, 127(2), 161–188.CrossRefGoogle Scholar
  36. Stojanovic, B. 2013. The Riddle of Thinking: Thinking, Fast and Slow. Panoeconomicus, 2013(4), 569–576.Google Scholar
  37. Sunstein, C. R. 2013. The Storrs Lectures: Behavioral Economics and Paternalism. Yale Law Journal, 122(7), 1826–1899.Google Scholar
  38. Thaler, R. H. 2008. Mental accounting and consumer choice. Marketing Science, 27(1), 15–25.CrossRefGoogle Scholar
  39. Thaler, R. H. 1980. Toward a positive theory of consumer choice. Journal of Economic Behavior and Organization, 1(1), 39–60.Google Scholar
  40. Thaler, R. H., & Sunstein, C. R. 2008. Nudge: Improving Decisions About Health, Wealth, and Happiness (pp. 108–109). New Haven: Yale University Press.Google Scholar
  41. Thaler, R. H., Sunstein, Cass R., & Balz, John P. 2010. Choice Architecture. University of Chicago Booth School of Business Working Paper.Google Scholar
  42. Trout, J. D. 2005. Paternalism and cognitive bias. Law and Philosophy, 24(4), 393–434.CrossRefGoogle Scholar
  43. Tversky, A., & Kahneman, D. 1981. The Framing of Decisions and the Psychology of Choice. Science, 211(4481), 453–458.CrossRefGoogle Scholar
  44. Tversky, A., & Kahneman, D. 1992. Advances in Prospect Theory: Cumulative Representation of Uncertainty. Journal of Risk and Uncertainty, 5(4), 297–323.CrossRefGoogle Scholar
  45. Tversky, A., Slovic, P., & Kahneman, D. 1990. The Causes of Preference Reversal. The American Economic Review, 80(1), 204–217.Google Scholar
  46. Vis, B. 2011. Prospect Theory and Political Decision Making. Political Studies Review, 9(3), 334–343.CrossRefGoogle Scholar
  47. Young, B. 2011. The Invisible Gorilla. Dental Products Report, 45(4).Google Scholar
  48. Zarri, L. 2010. Behavioral economics has two ‘souls’: Do they both depart from economic rationality? The Journal of Socio-Economics, 39(5), 562–567.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.The George Washington UniversityWashingtonUSA

Personalised recommendations