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dc.contributor.authorWhalley, Johnen_US
dc.date.accessioned2009-01-28T15:53:02Z-
dc.date.available2009-01-28T15:53:02Z-
dc.date.issued2005en_US
dc.identifier.urihttp://hdl.handle.net/10419/18809-
dc.description.abstractThis paper contrasts the modern use of the assumption that rationality guides individual economic behaviour, as reflected in simple models of utility and profit maximization, to literature between 1890 and 1930 which sharply challenged the use of such an assumption, as well as to later literature in economic psychology from Herbert Simon onwards which sees economic (and other) cognitive processes in different ways. Some of the earlier literature proposed objective and operational notions of rationality based on the availability of information, ability to reason (cognitive skills), and even morality. Learning played a major role in individuals achieving what was referred to as complete rationality. I draw on these ideas, and suggest that developing models in which economic agents have degrees (or levels) of economic cognition which are endogenously determined could both change the perceptions economists have on policy matters and incorporate findings from recent economic psychology literature. This would remove the issue of whether economic agents are dichotomously rational or irrational, and instead introduce continuous metrics of cognition into economic thinking. Such an approach also poses the two policy issues of whether raising levels of economic cognition should be an objective of policy and whether policy interventions motivated by departures from full economic cognition should be analyzed.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesCESifo working papers 1445en_US
dc.subject.jelD00en_US
dc.subject.jelB5en_US
dc.subject.jelB1en_US
dc.subject.jelB00en_US
dc.subject.ddc330en_US
dc.subject.keywordlearningen_US
dc.subject.keywordcomplete rationalityen_US
dc.subject.stwVerhaltensökonomiken_US
dc.subject.stwKognitionen_US
dc.subject.stwLernprozessen_US
dc.subject.stwRationales Verhaltenen_US
dc.titleRationality, irrationality and economic cognitionen_US
dc.typeWorking Paperen_US
dc.identifier.ppn485162938en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
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