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Rationality and uncertainty

Author

Listed:
  • Andrew Postlewaite

    (University of Pennsylvania)

  • David Schmeidler

    (Interdisciplinary Center, Herzliya and Tel Aviv University)

Abstract

Experimental psychologists and economists construct an individual or interactive decision situation in the laboratory. They find non-negligible differences between the observed behavior of participants and the theoretically implied behavior. We refer here to the expected utility theory and to strategic equilibrium in non-cooperative game theory. We comment on the question whether rationality, implies these theoretical behaviors and whether the non-negligible differences as above imply that participants in experiments are irrational. We also comment on the relation between rationality and consistency, in particular in situations of uncertainty.

Suggested Citation

  • Andrew Postlewaite & David Schmeidler, 2012. "Rationality and uncertainty," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 120(3), pages 289-294.
    • Handle: RePEc:vep:journl:y:2012:v:120:i:3:p:289-294
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    Citations

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    Cited by:

    1. Faro, José Heleno & Lefort, Jean-Philippe, 2019. "Dynamic objective and subjective rationality," Theoretical Economics, Econometric Society, vol. 14(1), January.
    2. Andreas Richter & Jörg Schiller & Harris Schlesinger, 2014. "Behavioral insurance: Theory and experiments," Journal of Risk and Uncertainty, Springer, vol. 48(2), pages 85-96, April.

    More about this item

    Keywords

    Biases; Decision making; Bayesian; Behavioral Economics; Uncertainty;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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