Rationality

About: Rationality is a research topic. Over the lifetime, 20459 publications have been published within this topic receiving 617787 citations.

Decision Making: THE RELEVANCE OF QUASI RATIONALITY IN COMPETITIVE MARKETS

Abstract: Economists generally attribute considerable rationality to the agents in their models. The recent popularity of rational expectations models is more an example of a general tendency than a radical departure. Since rationality is simply assumed, there is little in the literature to suggest what would happen if some agents were not rational. This is surprising in light of the accumulating evidence that supports Herbert Simon's view that man should be considered at most boundedly rational. In fact, Kenneth Arrow concludes his recent review of this evidence as follows: "I hope to have made a case for the proposition that an important class of intertemporal markets shows systematic deviations from individual rational behavior and that these deviations are consistent with evidence from very different sources... (1982, p. 8). In this paper we start to explore the implications of irrationality for economics. We begin by defining what we mean by rational, and what departures from rationality we think are most likely. We then consider what happens if rational and less than fully rational agents (whom we call quasi rational) interact in competitive markets. We show that the knee-jerk reaction of some economists that competition will render irrationality irrelevant is apt only in very special cases, probably rarely observed in the real world. Our analysis highlights the important roles played by arbitrageurs and entrepreneurs. We find that, perhaps counter to intuition, more competition can actually make things worse by leaving no possibility of a profit to an entrepreneur who offers education or information.

The Influence of Decision, Environmental and Firm Characteristics on the Rationality of Strategic Decision‐Making*

Abstract: This paper develops an integrated model of strategic decision-making rationality. The model is informed by three perspectives that respectively identify decision, environmental and firm characteristics as influences on the rationality of decision processes. The results of a study in Egypt indicate that the rationality of strategic decision-making processes is shaped by variables identified by all three perspectives, and that such decision processes cannot adequately be modelled in terms of a single perspective only. However, the study also suggests that the three perspectives do not contribute in equal measure to explaining strategic decision making, and that the national setting is relevant for the extent to which strategic decision-makers take account of environmental characteristics. The location of the investigation in Egypt highlights some deviations from previous research that could be attributed to nation-specific factors, both cultural and institutional.

Collective memory and cultural constraint : Holocaust myth and rationality in German politics

Abstract: Using a case study of official representations of the Holocaust in the Federal Republic of Germany, the authors address the ways in which collective memory constrains political claim-making. In contrast to the commonly held views that the past is either durable or malleable, they characterize collective memory in political culture as an ongoing process of negotiation through time. They distinguish between mythic and rational political cultural logics, and delineate mechanisms through which these logics operate as constraints : taboo and prohibition, duty and requirement. With these conceptual distinctions, they describe transformations in the memory of the Holocaust as a constraint in German political culture

Back to the rough ground : 'phronesis' and 'techne' in modern philosophy and in Aristotle

Abstract: Our society has come to think that truth lies in the area of the measurable, of empirical evidence and objective analysis, that particular mode of rationality called "technical reason", and that the knowledge of this mode is what is needed to guide humankind in all areas of practice. In this work, Joseph Dunne develops a philosophical context for exposing the limits of technical reason and for analysing the practical knowledge that informs successful activity in different domains. Dunne begins by examining the retrieval of Aristotle's distinction between phronesis/praxis and techne/poiesis in the work of John Henry Newman, R.G. Collingwood and Hannah Arendt. He then discusses the universal significance claimed for the Aristotelian distinction in the philosophical hermeneutics of Hans-Georg Gadamer, and examines how the distinction is both invoked and eventually challenged in the critical theory of Jurgen Habermas. "Back to the Rough Ground" then examines the two central categories in Aristotle's own texts, emphasising the theoretical inclination of techne and the inescapably personal and experimential nature of phronesis. The book concludes by reviewing the main themes of the work - the nature of experience, practice, language and finitude, the limits of reason, and the need for a reconstruction of the whole modern philosophy of consciousness. Dunne suggests implications for different areas of study, and situates the volume within the context of current philosophical debates, especially with regard to universalism and post-modernism.

The Limits of Rationality

Abstract: Prevailing economic theory presumes that agents act rationally when they make decisions, striving to maximize the efficient use of their resources. Psychology has repeatedly challenged the rational choice paradigm with persuasive evidence that people do not always make the optimal choice. Yet the paradigm has proven so successful a predictor that its usecontinues to flourish, fueled by debate across the social sciences over "why" it works so well. Intended to introduce novices to rational choice theory, this accessible, interdisciplinary book collects writings by leading researchers. The Limits of Rationality illuminates the rational choice paradigm of social and political behavior itself, identifies its limitations, clarifies the nature of current controversies, and offers suggestions for improving current models. In the first section of the book, contributors consider the theoretical foundations of rational choice. Models of rational choice play an important role in providing a standard of human action and the bases for constitutional design, but do they also succeed as explanatory models of behavior? Do empirical failures of these explanatory models constitute a telling condemnation of rational choice theory or do they open new avenues of investigation and theorizing? Emphasizing analyses of norms and institutions, the second and third sections of the book investigate areas in which rational choice theory might be extended in order to provide better models. The contributors evaluate the adequacy of analyses based on neoclassical economics, the potential contributions of game theory and cognitive science, and the consequences for the basic framework when unequal bargaining power and hierarchy are introduced."