Most economic models make use of extreme rationality hypotheses: firms maximize profits with full knowledge of their technology and prices, and, investors are subjective expected utility maximizers whose beliefs are correct. Surely, some firms and some investors do not always behave as these models hypothesize. But does this matter for predictions of market outcomes? It could be that the aggreg...

A Review of Reviving Rationality: Saving Cost-Benefit Analysis for the Sake Environment and Our Health. By Michael A. Livermore Richard L. Revesz.

RATIONALITY IS ESSENTIALLY connected with norms. In Western philosophy, while there has been much disagreement over what the norms of rationality are, there seems to have been substantial agreement that these norms are narrowly prescriptive; in fact there is a pronounced tendency to see rationality as leaving the agent no scope for choice in matters of thought, belief, inference and behaviour. ...

in this article, after reviewing the difference between fundamentalist and anti-fundamentalist philosophy, the features of the rationality will be explained from the perspective of five anti-fundamentalist philosophers (habermas, richard rorty, macintyre, michel foucault and hayek). the common point stated by all these philosophers is that they all criticize metaphysics and doubt about the basi...

The assumption of rationality is both one of the most important and most controversial assumptions of modern economics. This article discusses what current experimental economic as well as neuroscience research tells us about the relationship between rationality and the mechanisms of human decision-making. The article explores the meaning of rationality, with a discussion of the distinction bet...

Given that more than 30% of healthcare costs are wasted on inappropriate care, suboptimal care is increasingly connected to the quality of medical decisions. It has been argued that personal decisions are the leading cause of death, and 80% of healthcare expenditures result from physicians' decisions. Therefore, improving healthcare necessitates improving medical decisions, ie, making decisions...