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Date: | Fri Mar 31 17:18:49 2006 |
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Gary Mongiovi said:
> It seems to me that as a scientific category,
> <rationality> leaves much to be desired; it is
> little more than a normative label that economists
> assign to behaviour that validates their
> propositions and withhold from behavior that does
> not. It's really not very useful for explaining what
> people actually do.
Actually I think it's highly useful and quite
realistic, provided that you avoid some of the
pitfalls of Neoclassical economics. People have ends
and seek the best means to satisfy those ends. It's
quite simple as far as I'm concerned- If I'm hungry I
buy food not an umbrella (and at the lowest price). If
I need a bridge built I hire engineers not
musicians(and at the best wage)- who would deny that
people seek effective means to satisfy ends? Of course
people do not equate costs and benefits at
infinitesimal margins given convex twice
differentiable utility functions, but does that mean
that we are irrational? and if we are irrational then
isn't economics just a waste of time? After all, if the
members of society are all just irrational what sense
is there in trying to make sense out of society?
Without some notion of imperfect, bounded, or partial
rationality there isnt much for us to say, apart from
noting that nothing really makes sense. As far as I am
concerned this is as wrong and uninteresting as fully
deterministic neoclassical economics.
Doug Mackenzie
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