Rationality and Efficiency: From Experimentation in (recent) Applied Microeconomics to Conceptual Issues
AbstractThis paper investigates how foundational and conceptual issues around economic rationality, which are usually discussed with respect to economic theory, materialize into recent applied microeconomics. We concentrate on three radically different subfield of microeconomics – the economics of discrimination, development economics and the economics of insurance – to look at how the recent rise of experimental methods and behavioral economics within mainstream economics have changed the conceptual relationship between economic rationality and economic efficiency, without changing the substance of these notions. The perspective of going from applied work of microeconomics in the field to conceptual and foundational issues on rationality reveals another issue that has not been much discussed in the reflexive literature yet: how warranted is the analytical distinction made in economics among interpersonal preferences, intertemporal preferences and preferences for risk and uncertainty? We show that this issue has straightforward consequences both on both economic theory and on the real world through the policy recommendations made by microeconomists.
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Bibliographic InfoPaper provided by Groupe de REcherche en Droit, Économie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis in its series GREDEG Working Papers with number 2013-21.
Length: 44 pages
Date of creation: Jun 2013
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-15 (All new papers)
- NEP-EXP-2013-07-15 (Experimental Economics)
- NEP-HPE-2013-07-15 (History & Philosophy of Economics)
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