Does optimization imply rationality?
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.
|Date of creation:||1998|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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).
- Lismont, L. & Mongin, P., . "On the logic of common belief and common knowledge," CORE Discussion Papers RP 1104, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- D. B. Bernheim, 2010.
"Rationalizable Strategic Behavior,"
Levine's Working Paper Archive
514, David K. Levine.
- Campbell, Donald E, 1978. "Realization of Choice Functions," Econometrica, Econometric Society, vol. 46(1), pages 171-80, January.
- Fishburn, Peter C, 1991. "Nontransitive Preferences in Decision Theory," Journal of Risk and Uncertainty, Springer, vol. 4(2), pages 113-34, April.
- Conlisk, John, 1988. "Optimization cost," Journal of Economic Behavior & Organization, Elsevier, vol. 9(3), pages 213-228, April.
- Sen, Amartya K, 1973. "Behaviour and the Concept of Preference," Economica, London School of Economics and Political Science, vol. 40(159), pages 241-59, August.
- Lipman, Barton L, 1991. "How to Decide How to Decide How to. . . : Modeling Limited Rationality," Econometrica, Econometric Society, vol. 59(4), pages 1105-25, July.
- Philippe Mongin, 1984. "Modèle rationnel ou modèle économique de la rationalité ?," Revue Économique, Programme National Persée, vol. 35(1), pages 9-64.
- Plott, Charles R, 1973. "Path Independence, Rationality, and Social Choice," Econometrica, Econometric Society, vol. 41(6), pages 1075-91, November.
- Amartya K. Sen, 1971. "Choice Functions and Revealed Preference," Review of Economic Studies, Oxford University Press, vol. 38(3), pages 307-317.
- 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.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:37740. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.