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An exploratory analysis of composite choices: Weighing rationality versus irrationality

  • Lester, Bijou Yang
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    Humans are engineered neurologically to make rational and irrational choices. This paper introduces a new paradigm for decision making – a composite choice model – in which economic agents are constantly weighing rationality versus irrationality when encountering options. In an exploratory, deterministic, two-period model, an assumption of a two-way cross-embedment (i.e., a two-way interaction between the rational and irrational components) results in a paradoxical phenomenon, an outcome of either tending toward bliss or abyss at the end of the first period. This implies, for instance, a psychological struggle between two selves within the mind. The paradigm proposed is compared to the dual-process theories recently developed by the cognitive sciences. Future research will explore implications for public policy design and implementation.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1053535711001120
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    Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

    Volume (Year): 40 (2011)
    Issue (Month): 6 ()
    Pages: 949-958

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    Handle: RePEc:eee:soceco:v:40:y:2011:i:6:p:949-958
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620175

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