Abstract
It is shown that, under general conditions, rational random behavior (appropriately defined) is equivalent to large-sample maximum-likelihood estimation of the theoretically optimal decision. Some supporting evidence, based on Dutch and American consumption data, is presented. The approach can also be used as a statistical basis for the delegation of authority.
This article first appeared in the Journal of the American Statistical Association, 69 (1974), 310–314. Reprinted with the permission of The American Statistical Association. Henri Theil is university professor and director, Center for Mathematical Studies in Business and Economics, Graduate School of Business/Department of Economics, University of Chicago, Chicago, IL, 60637. Research for this article was supported in part by the National Science Foundation under Grant GS-30084. Valuable comments by an associate editor and a referee are gratefully acknowledged.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Bentzel, R., and Bent Hansen: 1955, “On Recursiveness and Interdependency in Economic Models,” Review of Economic Studies, 22, No. 59, 153–168.
Finizza, Anthony J.: 1971, “Estimation of Demand Equations for a Subgroup of Meat Commodities,” Unpublished Ph.D. dissertation, Graduate School of Business, University of Chicago.
Marschak, Jacob and W.H. Andrews, Jr.: 1944, “Random Simultaneous Equations and the Theory of Production,” Econometrica, 12, 143–205.
Paulus, John D.: 1972, “The Estimation of Large Systems of Consumer Demand Equations Using Stochastic Prior Information,” Unpublished Ph.D. dissertation, Graduate School of Business, University of Chicago.
Theil, Henri: 1967, Economics and Information Theory, New York: American Elsevier Publishing Company, New York, and North-Holland Publishing Company, Amsterdam.
Theil, Henri: 1971, “An Economic Theory of the Second Moments of Disturbances of Behavioral Equations,” The American Economic Review, 61, New York, 190–194.
Theil, Henri: 1972, Statistical Decomposition Analysis with Applications in the Social and Administrative Sciences, American Elsevier Publishing Company, New York, and North-Holland Publishing Company, Amsterdam.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1992 Springer Science+Business Media Dordrecht
About this chapter
Cite this chapter
Theil, H. (1992). A Theory of Rational Random Behavior. In: Raj, B., Koerts, J. (eds) Henri Theil’s Contributions to Economics and Econometrics. Advanced Studies in Theoretical and Applied Econometrics, vol 25. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-2408-9_8
Download citation
DOI: https://doi.org/10.1007/978-94-011-2408-9_8
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-5062-3
Online ISBN: 978-94-011-2408-9
eBook Packages: Springer Book Archive