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Social Circumstances and Rationality:

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  • Amos Witztum

Abstract

Upon the uniformity in individuals’ decision‐making mechanism rests a great deal of the legitimacy of natural liberty. As we are all equally sovereign (cognitive‐wise), we only strike deals that inevitably make us better off. We all gain from trade and thus, as everyone is better off, so must be the whole of society. But could it be that people are rational yet not equally sovereign? In this paper, we examine Smith's interpretation of rationality, and we find that it is fundamentally a social concept. As such, the manifestation of rationality in individual behavior depends on how sophisticated is individuals’ access to public opinion. Consequently, individuals who are equally self‐interested may face very different sets of options, which are determined by their social circumstances. This difference may suggest that, although all agents may be motivated by the same objective, they cannot be considered as equally sovereign.

Suggested Citation

  • Amos Witztum, 2005. "Social Circumstances and Rationality:," American Journal of Economics and Sociology, Wiley Blackwell, vol. 64(4), pages 1025-1047, October.
    • Handle: RePEc:bla:ajecsc:v:64:y:2005:i:4:p:1025-1047
    DOI: 10.1111/j.1536-7150.2005.00424.x
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    References listed on IDEAS

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