BEHAVIORAL ANALYSIS OF ECONOMIC CHOICE: CONTRIBUTION TO IMPROVING ECONOMIC RATIONALITY

Dragan Petrovic

DOI Number
-
First page
191
Last page
205

Abstract


If we start from the presumption that the aim of the theoretical analysis of the complex socio-economic reality is to provide certain knowledge by applying of which there can be improvement and betterment of that reality, then economical and theoretical mainstream usually does this starting from axiom of the rationality. On the other hand, if we keep in mind the current empirical data on the numerous problems and inefficient functioning of the economic actors, then the logical question that occurs is whether the presumption of the unlimited rationality of the economic subjects should be so easily idealised. Starting from the fact that the bihevioral economics has a special role in the powerful critical attack on the “strong core” of the neo-classical mainstream, this paper discusses numerous psychological limitations of the process of economic decision-making, and the possibilities of their overcoming. In relation to this, we especially emphasize the importance of the behavioral analysis and its instrumentalist support directed toward the improvement of economic rationality and the quality of human decisions.

Key words: rational choice, behavioral economics, behavioral anomalies and biases, ‘new’ paternalism

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References


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