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Practical beliefs vs. scientific beliefs: two kinds of maximization

Listed author(s):
  • Elias Khalil

    ()

There are two kinds of beliefs. If the ultimate objective is wellbeing (utility), the generated beliefs are “practical.” If the ultimate objective is truth, the generated beliefs are “scientific.” This article defends the practical/scientific belief distinction. The proposed distinction has been ignored by standard rational choice theory—as well as by its two major critics, viz., the Tversky/Kahneman program and the Simon/Gigerenzer program. One ramification of the proposed distinction is clear: agents who make errors with regard to scientific beliefs (e.g., the conjunction fallacy) should not be taken as committing irrationality—because they are most probably engaging the other kind of maximization, the pursuit of wellbeing. Copyright Springer Science+Business Media New York 2013

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File URL: http://hdl.handle.net/10.1007/s11238-012-9338-z
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Article provided by Springer in its journal Theory and Decision.

Volume (Year): 74 (2013)
Issue (Month): 1 (January)
Pages: 107-126

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Handle: RePEc:kap:theord:v:74:y:2013:i:1:p:107-126
DOI: 10.1007/s11238-012-9338-z
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Order Information: Web: http://www.springer.com/economics/economic+theory/journal/11238/PS2

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  1. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
  2. 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.
  3. Elias L. Khalil, 2011. "Rational, Normative and Procedural Theories of Beliefs: Can They Explain Internal Motivations?," Journal of Economic Issues, M.E. Sharpe, Inc., vol. 45(3), pages 641-664, September.
  4. Neal V. Dawson & Frederick Gregory, 2009. "Correspondence and coherence in science: A brief historical perspective," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 4(2), pages 126-133, March.
  5. Becker, Gary S, 1993. "Nobel Lecture: The Economic Way of Looking at Behavior," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 385-409, June.
  6. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680, April.
  7. Khalil, Elias L., 2010. "The Bayesian fallacy: Distinguishing internal motivations and religious beliefs from other beliefs," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 268-280, August.
  8. Elias Khalil, 2009. "Natural selection and rational decision: two concepts of optimization," Journal of Evolutionary Economics, Springer, vol. 19(3), pages 417-435, June.
  9. Khalil, Elias L, 1997. "Buridan's Ass, Risk, Uncertainty, and Self-Competition: A Theory of Entrepreneurship," Kyklos, Wiley Blackwell, vol. 50(2), pages 147-163.
  10. Philip T. Dunwoody, 2009. "Theories of truth as assessment criteria in judgment and decision making," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 4(2), pages 116-125, March.
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