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The Weak Rationality Principle in Economics

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  • Gebhard Kirchgässner

Abstract

The weak rationality principle is not an empirical statement but a heuristic rule of how to proceed in social sciences. It is a necessary ingredient of any ‘understanding’ social science in the Weberian sense. In this paper, first this principle and its role in economic theorizing is discussed. It is also explained why it makes sense to use a micro-foundation and, therefore, employ the rationality assumption in economic models. Then, with reference to the ‘bounded rationality’ approach, the informational assumptions are discussed. Third, we address the assumption of self-interest which is often seen as a part of the rationality assumption. We conclude with some remarks on handling the problems of ‘free will’ as well as ‘weakness of the will’ within the economic approach.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1410.

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Date of creation: 2005
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Handle: RePEc:ces:ceswps:_1410

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Keywords: rationality; self interest; micro-foundation; bounded rationality;

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Cited by:
  1. Gebhard Kirchgässner, 2004. "(Why) Are Economists Different?," University of St. Gallen Department of Economics working paper series 2004, Department of Economics, University of St. Gallen 2004-18, Department of Economics, University of St. Gallen.

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