IDEAS home Printed from https://ideas.repec.org/a/gmf/journl/y2004i20p177-191.html
   My bibliography  Save this article

Questioning Rationality: The case for risk consumption

Author

Listed:
  • Maria Isabel Clímaco

    (ISCA)

  • Luís Moura Ramos

    () (Faculty of Economics, University of Coimbra)

Abstract

The standard assumption of rational, forward looking behavior has been heavily questioned given the impossibility of understanding some risk consumption behaviors within such a framework. The Becker and Murphy theory of rational addiction made a start on this debate fostering new refinements within the original rational theory framework as well as promising approaches based on the latest developments of cognitive science. This paper makes an overview confronting two main approaches highlighting their different time preferences assumptions. On the one hand the debate assumes rationality even in extreme situations of risk consumption – addictive behavior. On the other, new developments in the explanation of habits and addictive behaviours take an economic-psychological approach into consideration and have substantially different policy implications.

Suggested Citation

  • Maria Isabel Clímaco & Luís Moura Ramos, 2004. "Questioning Rationality: The case for risk consumption," Notas Económicas, Faculty of Economics, University of Coimbra, issue 20, pages 177-191, December.
  • Handle: RePEc:gmf:journl:y:2004:i:20:p:177-191
    as

    Download full text from publisher

    File URL: http://notas-economicas.fe.uc.pt/pt/numbers/number020n.htm
    Download Restriction: no

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gmf:journl:y:2004:i:20:p:177-191. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ana Seiça). General contact details of provider: http://edirc.repec.org/data/fecucpt.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.