THE RATIONAL IRRATIONALITY

Petko Miran

Abstract


One of the fundamental theories in Economics, namely the Rational Choice Theory, is seriously questioned these days. A lot of examples of irrational behavior have been provided, and a Nobel Prize was awarded for the achievements in the field. Yet, a careful scrutiny of these instances shows that, in most of the cases, the light of rationality shines through the observed irrational behavior. A hypothesis in the partial support of the Rational Choice Theory is proposed. It takes into account the subject’s understandings, attitude and information in describing a choice as rational or irrational. Therefore, one and the same activity could be considered as perfectly rational, as well as perfectly irrational at the same time.

References


Cialdini, Robert B., Influence. The Psychology of Persuasion, (HarperCollins e-books, 1993).

Freedman, Jonathan L., and Scott C. Fraser, “Compliance Without Pressure: The Foot-In-The-Door Technique,” Journal of Personality and Social Psychology, 4(1966), 195–202.

Pigou, Arthur C., Industrial Fluctuations, (London, Macmillan and Company, 1923).

Thaler, Richard H., Misbehaving: The Making of Behavioral Economics, (New York, W. W. Norton & Company, 2015).


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