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Does optimization imply rationality ?

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  • P. Mongin

Abstract

The relations between rationality and optimization have been widely discussed in the wake of Herbert Simon's work, with the common conclusion that the rationality concept does not imply the optimization principle. The paper is partly concerned with adding evidence for this view, but its main, more challenging objective is to question the converse implication from optimization to rationality, which is accepted even by bounded rationality theorists. We discuss three topics in succession: (1) rationally defensible cyclical choices, (2) therevealed preference theory of optimization, and (3) the infinite regress of optimization. We conclude that (1) and (2) provide evidence only for the weak thesis that rationality does not imply optimization. But (3) is seen to deliver a significant argument for the strong thesis that optimization does not imply rationality.
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Suggested Citation

  • P. Mongin, 1998. "Does optimization imply rationality ?," THEMA Working Papers 98-17, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  • Handle: RePEc:ema:worpap:98-17
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    1. LISMONT, Luc & MONGIN, Philippe, 1994. "On the Logic of Common Belief and Common Knowledge," CORE Discussion Papers 1994005, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. ., 1994. "Technical Change and Technological Regimes," Chapters,in: The Elgar Companion to Institutional and Evolutionary Economics, chapter 127 Edward Elgar Publishing.
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    4. Karni, Edi & Schmeidler, David, 1976. "Independence of nonfeasible alternatives, and independence of nonoptimal alternatives," Journal of Economic Theory, Elsevier, vol. 12(3), pages 488-493, June.
    5. Amartya K. Sen, 1971. "Choice Functions and Revealed Preference," Review of Economic Studies, Oxford University Press, vol. 38(3), pages 307-317.
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    7. Campbell, Donald E, 1978. "Realization of Choice Functions," Econometrica, Econometric Society, vol. 46(1), pages 171-180, January.
    8. Sen, Amartya K, 1973. "Behaviour and the Concept of Preference," Economica, London School of Economics and Political Science, vol. 40(159), pages 241-259, August.
    9. Lipman, Barton L, 1991. "How to Decide How to Decide How to. . . : Modeling Limited Rationality," Econometrica, Econometric Society, vol. 59(4), pages 1105-1125, July.
    10. Frédéric Laville, 1998. "Modélisations de la rationalité limitée : de quels outils dispose-t-on ?," Revue Économique, Programme National Persée, vol. 49(2), pages 335-365.
    11. Fishburn, Peter C, 1991. "Nontransitive Preferences in Decision Theory," Journal of Risk and Uncertainty, Springer, vol. 4(2), pages 113-134, April.
    12. Plott, Charles R, 1973. "Path Independence, Rationality, and Social Choice," Econometrica, Econometric Society, vol. 41(6), pages 1075-1091, November.
    13. Anand, Paul, 1993. "The Philosophy of Intransitive Preference," Economic Journal, Royal Economic Society, vol. 103(417), pages 337-346, March.
    14. Philippe Mongin, 1984. "Modèle rationnel ou modèle économique de la rationalité ?," Revue Économique, Programme National Persée, vol. 35(1), pages 9-64.
    15. Conlisk, John, 1988. "Optimization cost," Journal of Economic Behavior & Organization, Elsevier, vol. 9(3), pages 213-228, April.
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    Cited by:

    1. Marc Fleurbaey & Philippe Mongin, 2005. "The news of the death of welfare economics is greatly exaggerated," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 25(2), pages 381-418, December.
    2. Francesco GUALA, 2017. "Preferences: Neither Behavioural nor Mental," Departmental Working Papers 2017-05, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    3. Paola Manzini & Marco Mariotti, 2003. "How vague can one be? Rational preferences without completeness or transitivity," Game Theory and Information 0312006, EconWPA, revised 16 Jul 2004.
    4. Philippe Mongin, 2007. "L'a priori et l'a posteriori en économie," Recherches économiques de Louvain, De Boeck Université, vol. 73(1), pages 5-53.
    5. Jean-Sébastien Lenfant, 2018. "Probabilizing the consumer: Georgescu-Roegen, Marschak and Quandt on the Modeling of the Consumer in the 1950s," Post-Print hal-01714635, HAL.
    6. Michaël Lainé, 2014. "Vers une alternative au paradigme de la rationalité ? Victoires et déboires du programme spinoziste en économie," Post-Print hal-01335618, HAL.

    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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