The Weak Rationality Principle in Economics
AbstractThe weak rationality principle is not an empirical statement but a heuristic rule 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 of handling the problems of ?free will’ as well as ?weakness of the will’ within the economic approach.
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 InfoPaper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2004 with number 2004-13.
Length: 19 pages
Date of creation: Dec 2004
Date of revision:
Rationality; Self Interest; Micro-Foundation; Bounded Rationality;
Other versions of this item:
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-12-20 (All new papers)
- NEP-EVO-2004-12-20 (Evolutionary Economics)
- NEP-HPE-2004-12-20 (History & Philosophy of 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.:
- Quiggin, John, 1987. "Egoistic Rationality and Public Choice: A Critical Review of Theory and Evidence," The Economic Record, The Economic Society of Australia, vol. 63(180), pages 10-21, March.
- Schlicht, Ekkehart, . "Grundlagen der ökonomischen Analyse," Monographs in Economics, University of Munich, Department of Economics, number 891, Jan-Jun.
- George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213.
- Hartmut Kliemt, 1984. "Nicht-explanative Funktionen eines "Homo oeconomicus" und Beschränkungen seiner explanativen Rolle," Homo Oeconomicus, Institute of SocioEconomics, vol. 2, pages 7-49.
- Charles L. Evans, 1994.
"The post-war U.S. Phillips curve: a comment,"
Working Paper Series, Macroeconomic Issues
94-15, Federal Reserve Bank of Chicago.
- Evans, Charles L., 1994. "The post-war U.S. Phillips curve a comment," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 41(1), pages 221-230, December.
- Brennan, Geoffrey & Pincus, Jonathan, 1987. "Rational Actor Theory in Politics: A Critical Review of John Quiggin," The Economic Record, The Economic Society of Australia, vol. 63(180), pages 22-32, March.
- Simon, Herbert A, 1979.
"Rational Decision Making in Business Organizations,"
American Economic Review,
American Economic Association, vol. 69(4), pages 493-513, September.
- Simon, Herbert A., 1978. "Rational Decision-Making in Business Organizations," Nobel Prize in Economics documents 1978-1, Nobel Prize Committee.
- Viktor Vanberg, 2004. "The rationality postulate in economics: its ambiguity, its deficiency and its evolutionary alternative," Journal of Economic Methodology, Taylor & Francis Journals, vol. 11(1), pages 1-29.
- Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
- Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, vol. 68(2), pages 1-16, May.
- Schelling, Thomas C, 1978. "Egonomics, or the Art of Self-Management," American Economic Review, American Economic Association, vol. 68(2), pages 290-94, May.
- Ronald Heiner, 1990. "Rule-governed behavior in evolution and human society," Constitutional Political Economy, Springer, vol. 1(1), pages 19-46, December.
- John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
- Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
- H. M. Shefrin & Richard Thaler, 1977.
"An Economic Theory of Self-Control,"
NBER Working Papers
0208, National Bureau of Economic Research, Inc.
- Sen, Amartya, 1994. "The Formulation of Rational Choice," American Economic Review, American Economic Association, vol. 84(2), pages 385-90, May.
- Santomero, Anthony M & Seater, John J, 1978. "The Inflation-Unemployment Trade-off: A Critique of the Literature," Journal of Economic Literature, American Economic Association, vol. 16(2), pages 499-544, June.
- Arrow, Kenneth J, 1986. "Rationality of Self and Others in an Economic System," The Journal of Business, University of Chicago Press, vol. 59(4), pages S385-99, October.
- Armen A. Alchian, 1950. "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy, University of Chicago Press, vol. 58, pages 211.
- Heiner, Ronald A, 1983. "The Origin of Predictable Behavior," American Economic Review, American Economic Association, vol. 73(4), pages 560-95, September.
- Fehr, Ernst & Gachter, Simon, 1998. "Reciprocity and economics: The economic implications of Homo Reciprocans1," European Economic Review, Elsevier, vol. 42(3-5), pages 845-859, May.
- Schelling, Thomas C, 1984. "Self-Command in Practice, in Policy, and in a Theory of Rational Choice," American Economic Review, American Economic Association, vol. 74(2), pages 1-11, May.
- Gebhard Kirchgässner, 2005.
"(Why) Are Economists Different?,"
CESifo Working Paper Series
1396, CESifo Group Munich.
- Gebhard Kirchgässner, 2004. "(Why) Are Economists Different?," University of St. Gallen Department of Economics working paper series 2004 2004-18, Department of Economics, University of St. Gallen.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joerg Baumberger).
If references are entirely missing, you can add them using this form.