Replacing Neo-Classical Maximization in the Realm of Human Action
The aim of this paper is to propose an original articulation of neoclassical and Austrian understanding of human behaviours into one logical sequence of “human process of decision”. We claim the methodological debate among economists on the representation of human action is due to a wrong interpretation of both neoclassical and Austrian economics: these two methodologies do not study the same step of human action. Far from being opposed, neoclassical and Austrian concepts of rationality and maximization can be articulated in a logical understanding of why and how do people act, and gathered into a global frame within neoclassical maximization is the conclusion, the final step, of the Austrian decision process. From this economic frame, we deduce a normative definition of economic efficiency and draw severe critics of neoclassical concepts of efficiency and redistributive justice as potential normative goals of economics. Besides, this conclusion leads to the definition of a new role for the economist in Law & Economics analysis: neoclassical economics should be used carefully and in very specific situation to enhance existing legal rules based upon non-economic goals, but never as a way to design laws according to their economic efficiency.
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- Boland, Lawrence A, 1981. "On the Futility of Criticizing the Neoclassical Maximization Hypothesis," American Economic Review, American Economic Association, vol. 71(5), pages 1031-36, December.
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