Journal of Risk and Uncertainty

, Volume 19, Issue 1–3, pp 73–105 | Cite as

Rationality for Economists?

  • Daniel McFadden


Rationality is a complex behavioral theory that can be parsed into statements about preferences, perceptions, and process. This paper looks at the evidence on rationality that is provided by behavioral experiments, and argues that most cognitive anomalies operate through errors in perception that arise from the way information is stored, retrieved, and processed, or through errors in process that lead to formulation of choice problems as cognitive tasks that are inconsistent at least with rationality narrowly defined. The paper discusses how these cognitive anomalies influence economic behavior and measurement, and their implications for economic analysis.

rationality behavioral decision theory preferences cognition 


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© Kluwer Academic Publishers 1999

Authors and Affiliations

  • Daniel McFadden
    • 1
  1. 1.Department of EconomicsUniversity of CaliforniaBerkeley

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