Rational Roots Of "Irrational" Behavior: New Theories Of Economic Decision-Making
AbstractThe neoclassical paradigm has proven to be a rich approach for evaluating a variety of issues for individual and social decision-making. However, an increasing body of literature suggests that actual behavior systematically violates the neoclassical utility model. This paper reviews a number of alternative models for decision-making. Results from the literature show several examples of apparently "irrational" behavior that can be explained in terms of these alternative motivations. The paper also extends the received literature by examining in some detail the implications of one such model which is based on the psychological feeling of ambivalence. The paper demonstrates that ambivalence has the potential for explaining the appearance of intransitive choices, the use of rules of thumb in decision-making and the large discrepancies between stated willingness-to-pay and willingness-to-accept, all of which have been observed in various settings. There are potentially great rewards from innovative research that expands the neoclassical paradigm to incorporate additional motivational factors in decision-making.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Northeastern Agricultural and Resource Economics Association in its journal Northeastern Journal of Agricultural and Resource Economics.
Volume (Year): 18 (1989)
Issue (Month): 2 (October)
Institutional and Behavioral Economics;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gregory, Robin, 1986. "Interpreting measures of economic loss: Evidence from contingent valuation and experimental studies," Journal of Environmental Economics and Management, Elsevier, vol. 13(4), pages 325-337, December.
- Machina, Mark J, 1987. "Choice under Uncertainty: Problems Solved and Unsolved," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 121-54, Summer.
- Harry Markowitz, 1952. "The Utility of Wealth," Journal of Political Economy, University of Chicago Press, vol. 60, pages 151.
- Schoemaker, Paul J H, 1982. "The Expected Utility Model: Its Variants, Purposes, Evidence and Limitations," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 529-63, June.
- Christian A. Vossler & Robert G. Ethier & Gregory L. Poe & Michael P. Welsh, 2003.
"Payment Certainty in Discrete Choice Contingent Valuation Responses: Results from a Field Validity Test,"
Southern Economic Journal,
Southern Economic Association, vol. 69(4), pages 886-902, April.
- Ethier, Robert G. & Poe, Gregory L. & Vossler, Christian A. & Welsh, Michael P., 2001. "Payment Certainty in Discrete Choice Contigent Valuation Responses: Results from a Field Validity Test," Working Papers 127668, Cornell University, Department of Applied Economics and Management.
- Poe, Gregory L. & Vossler, Christian A., 2009. "Consequentiality and contingent values: an emerging paradigm," MPRA Paper 38864, University Library of Munich, Germany.
- Rosenberger, Randall S. & Peterson, George L. & Clarke, Andrea & Brown, Thomas C., 2003. "Measuring dispositions for lexicographic preferences of environmental goods: integrating economics, psychology and ethics," Ecological Economics, Elsevier, vol. 44(1), pages 63-76, February.
- Hayes, William M. & Lynne, Gary D., 2004. "Towards a centerpiece for ecological economics," Ecological Economics, Elsevier, vol. 49(3), pages 287-301, July.
- Mandy Ryan & Fernando San Miguel, 2003. "Revisiting the axiom of completeness in health care," Health Economics, John Wiley & Sons, Ltd., vol. 12(4), pages 295-307.
- Gelso, Brett R. & Peterson, Jeffrey M., 2005. "The influence of ethical attitudes on the demand for environmental recreation: incorporating lexicographic preferences," Ecological Economics, Elsevier, vol. 53(1), pages 35-45, April.
- Peter A. Groothuis & John C. Whitehead, .
"Does Don't Know Mean No? Analysis of 'Don't Know' Responses in Dichotomous Choice Contingent Valuation Questions,"
9814, East Carolina University, Department of Economics.
- Peter Groothuis & John Whitehead, 2002. "Does don't know mean no? Analysis of 'don't know' responses in dichotomous choice contingent valuation questions," Applied Economics, Taylor & Francis Journals, vol. 34(15), pages 1935-1940.
- Peter A. Groothuis & John C. Whitehead, 2002. "Does Don't Know Mean No? Analysis of 'Don't Know Responses in Dichotomous Choice Contingent Valuation Questions," Working Papers 02-15, Department of Economics, Appalachian State University.
- Kim, Seon-Ae & Gillespie, Jeffrey M. & Paudel, Krishna P., 2008.
"Rotational grazing adoption in cattle production under a cost-share agreement: does uncertainty have a role in conservation technology adoption?,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 52(3), September.
- Seon-Ae Kim & Jeffrey M. Gillespie & Krishna P. Paudel, 2008. "Rotational grazing adoption in cattle production under a cost-share agreement: does uncertainty have a role in conservation technology adoption?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(3), pages 235-252, 09.
- Mooreland, Jay, II, 2011. "The Irrational Investor’s Risk Profile," Master's Theses 107787, University of Minnesota, Department of Applied Economics.
- Santos, Julie I. & Uchida, Emi & Anderson, Christopher & Swallow, Stephen, 2013. "Sources of Hypothetical Bias in Public Goods Experiments: A Disaggregated Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150389, Agricultural and Applied Economics Association.
- Iovanna, Richard & Newbold, Stephen C., 2007. "Ecological sustainability in policy assessments: A wide-angle view and a close watch," Ecological Economics, Elsevier, vol. 63(4), pages 639-648, September.
- Swallow, Stephen K., 1996. "Economic Issues In Ecosystem Management: An Introduction And Overview," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 25(2), October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.