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Rationality and Efficiency: From Experimentation in (recent) Applied Microeconomics to Conceptual Issues

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  • Dorian Jullien
  • Judith Favereau
  • Cléo Chassonnery-Zaigouche

Abstract

This paper investigates how foundational and conceptual issues around economic rationality, which are usually discussed with respect to economic theory, materialize into recent applied microeconomics. We concentrate on three radically different subfield of microeconomics – the economics of discrimination, development economics and the economics of insurance – to look at how the recent rise of experimental methods and behavioral economics within mainstream economics have changed the conceptual relationship between economic rationality and economic efficiency, without changing the substance of these notions. The perspective of going from applied work of microeconomics in the field to conceptual and foundational issues on rationality reveals another issue that has not been much discussed in the reflexive literature yet: how warranted is the analytical distinction made in economics among interpersonal preferences, intertemporal preferences and preferences for risk and uncertainty? We show that this issue has straightforward consequences both on both economic theory and on the real world through the policy recommendations made by microeconomists.

Suggested Citation

  • Dorian Jullien & Judith Favereau & Cléo Chassonnery-Zaigouche, 2013. "Rationality and Efficiency: From Experimentation in (recent) Applied Microeconomics to Conceptual Issues," GREDEG Working Papers 2013-21, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
  • Handle: RePEc:gre:wpaper:2013-21
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    References listed on IDEAS

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    1. Esther Duflo & Michael Kremer & Jonathan Robinson, 2011. "Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya," American Economic Review, American Economic Association, vol. 101(6), pages 2350-2390, October.
    2. Claire L. Adida & David D. Laitin & Marie-Anne Valfort, 2010. "Identifying barriers to Muslim integration in France," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00618060, HAL.
    3. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    4. Kenneth J. Arrow, 1998. "What Has Economics to Say about Racial Discrimination?," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 91-100, Spring.
    5. Claire L. Adida & David D. Laitin & Marie-Anne Valfort, 2016. "?One Muslim is Enough!? Evidence from a Field Experiment in France," Annals of Economics and Statistics, GENES, issue 121-122, pages 121-160.
    6. John B. Davis, 2008. "The turn in recent economics and return of orthodoxy," Cambridge Journal of Economics, Oxford University Press, vol. 32(3), pages 349-366, May.
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    Cited by:

    1. Dorian Jullien, 2016. "Under Uncertainty, Over Time and Regarding Other People: Rationality in 3D," GREDEG Working Papers 2016-20, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.

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