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Becker random behavior and the as-if defense of rational choice theory in demand analysis

Author

Listed:
  • Ivan Moscati

    (Universitá degli Studi dell’Insubria)

  • Paola Tubaro

    () (LRI - Laboratoire de Recherche en Informatique - UP11 - Université Paris-Sud - Paris 11 - CentraleSupélec - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, University of Greenwich)

Abstract

In discussing rational choice theory (RCT) as an explanation of demand behavior, Becker (1962, Journal of Political Economy, 70, 1–13) proposed a model of random choice in which consumers pick a bundle on their budget line according to a uniform distribution. This model has then been used in various ways to assess the validity of RCT and to support as-if arguments in defense of it. This paper makes both historical and methodological contributions. Historically, it investigates how the interpretation of Becker random behavior evolved between the original 1962 article and the modern experimental literature on individual demand, and surveys six experiments in which it has been used as an alternative hypothesis to RCT. Methodologically, this paper conducts an assessment of the as-if defense of RCT from the standpoint of Becker's model. It argues that this defense is ‘weak' in a number of senses, and that it has negatively influenced the design of experiments about RCT.

Suggested Citation

  • Ivan Moscati & Paola Tubaro, 2011. "Becker random behavior and the as-if defense of rational choice theory in demand analysis," Post-Print hal-01371313, HAL.
    • Handle: RePEc:hal:journl:hal-01371313
    DOI: 10.1080/1350178X.2011.579147
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01371313
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    Cited by:

    1. D. Wade Hands, 2014. "Paul Samuelson and Revealed Preference Theory," History of Political Economy, Duke University Press, vol. 46(1), pages 85-116, Spring.
    2. Bojan Krstic, Milos Krstic, 2015. "Rational Choice Theory And Random Behaviour," Ekonomika, Journal for Economic Theory and Practice and Social Issues 2015-01, „Ekonomika“ Society of Economists, Niš (Serbia).
    3. Distefano, Tiziano & Chiarotti, Guido & Laio, Francesco & Ridolfi, Luca, 2019. "Spatial Distribution of the International Food Prices: Unexpected Heterogeneity and Randomness," Ecological Economics, Elsevier, vol. 159(C), pages 122-132.
    4. Tiziano Distefano & Guido Chiarotti & Francesco Laio & Luca Ridolfi, 2018. "Spatial distribution of the international food prices: unexpected randomness and heterogeneity," SEEDS Working Papers 0118, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jan 2018.
    5. Krstic, Bojan & Krstic, Milos, 2015. "Rational Choice Theory And Random Behaviour," Ekonomika, Journal for Economic Theory and Practice and Social Issues, Society of Economists Ekonomika, Nis, Serbia, vol. 61(1), pages 1-13, March.

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