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Mind and choice in economics

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Author Info
Rizzello Salvatore () (University of Turin)
Abstract

This paper holds that the criteria of rational behavior, so far assumed in behavioral models, are not dufficiently realistic. The point of view here presented lies upon contemporary neurobiology that teaches how individual behavior responds to more complex and efficient criteria than the ones so far utilized in the decision making models. Following Simon's and Hayek's institutions, the paper takes the view that knowledge is the fruit of a process of "endogenous construction" and that perception represents the source of the unpredictability of behavior, and the cornerston of economic change. A relevant part of contemporary neurobiology has later confirmed these intuitions, and it can probably help us understand the role of emotions in the processes of choice. The development of this approach may have an influence on economic theory, especially with reference to economic behavior, theory of games, procedural rationality models, and pathdependent processes.

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Paper provided by University of Turin in its series CESMEP Working Papers with number 200206.

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Length: 24 pages
Date of creation: Jun 2002
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Handle: RePEc:uto:cesmep:200206

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  3. Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-81, September. [Downloadable!] (restricted)
  4. Simon, Herbert A, 1979. "Rational Decision Making in Business Organizations," American Economic Review, American Economic Association, vol. 69(4), pages 493-513, September. [Downloadable!] (restricted)
  5. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March. [Downloadable!] (restricted)
  6. Lachmann, Ludwig M, 1976. "From Mises to Shackle: An Essay on Austrian Economics and the Kaleidic Society," Journal of Economic Literature, American Economic Association, vol. 14(1), pages 54-62, March. [Downloadable!] (restricted)
  7. Kalai, Ehud & Lehrer, Ehud, 1991. "Rational Learning Leads to Nash Equilibrium," Working Papers 91-18, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  8. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-37, May. [Downloadable!] (restricted)
  9. Huber, Joel & Payne, John W & Puto, Christopher, 1982. " Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 9(1), pages 90-98, June.
  10. Ulrich Witt, 1992. "Evolutionary Concepts in Economics," Eastern Economic Journal, Eastern Economic Association, vol. 18(4), pages 405-419, Fall. [Downloadable!]
  11. Simonson, Itamar, 1989. " Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 16(2), pages 158-74, September.
  12. George J. Mailath, 1998. "Do People Play Nash Equilibrium? Lessons from Evolutionary Game Theory," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1347-1374, September. [Downloadable!] (restricted)
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