The strength of the neoclassical paradigm, generations of students have been told, lies in its hardheaded grounding in a general model of self-interested action. But recent developments in microeconomic theory have shown that the selfinterested behavior underlying neoclassical theory is artificially truncated: it depicts a charmingly Victorian but utopian world in which conflicts abound but a h...

Bayesian rationality is the paradigm of rational behavior in neoclassical economics. An economic agent is deemed rational when she maximizes her subjective expected utility and consistently revises her beliefs according to Bayes's rule. The paper raises the question of how, when and why this characterization of rationality came to be endorsed by mainstream economists. Though no definitive answe...

I examine how neoclassical economic theory is useful to the understanding of economic policy. I also describe what I view as the role of economic theory in economics. This talk was prepared for the conference ‘‘Is Economics Becoming a Hard Science?’’ 29--30 October, 1992, Paris, France. An earlier version of this paper was published (in French) in A. Autume and J. Cartelier, ed. L’Economie Devi...

Marshall was the great synthesiser of neoclassical economics. Yet with his qualified assumption of self-interest, his emphasis on variation in economic evolution, and his cautious attitude to the use of mathematics, Marshall differs fundamentally from other leading neoclassical contemporaries. Metaphors inspire more specific analogies and ontological assumptions, and Marshall used the guiding m...

Gill advocated using goal-based utility functions versus the standard commodity-based neoclassical utility function. He argued that a goal-based utility function would resolve many observed inconsistencies between what economics predicts and the behavior observed in psychological experiments. To support Gill’s argument, this paper focuses on the standard extension of neoclassical utility to gam...

Neoclassical and behavioral economics disagree over the human consumption of dietary fat, a pervasive behavior that increases morbidity mortality. assumes people are choosing optimal diets, trading off utility money today in return for disease early death. In contrast, argues making poor decisions. Evolutionary biology suggests that, our ancestors, choices were optimal, constrained manner consi...

I analyze two connections between neoclassical and classical economics. First, I consider the indeterminacy that arises for both schools: in the neoclassical theories of overlapping generations and of factor pricing and in Sraffa’s price theory. Neoclassical indeterminacy occurs only in environments where relative prices can change through time; otherwise, determinacy obtains. Although these re...