Contribution to Book
Irrationality Is Not Unreasonable
Nudging Public Policy: Examining the Benefits and Limitations of Paternalistic Public Policies
(2022)
Abstract
The key concept in all of this is rationality. From the beginning, behavioral economics established itself in opposition to standard economics and especially to the standard economics postulation of economic rationality. And so, the argument basically goes that people do not behave rationally. Instead, they are irrational or, as theorized more recently, boundedly rational. They are less than completely rational. And therefore, we must reassess the normative quality of what they do. Both behavioral economists and standard economists accept the concept of economic rationality as a normative standard. Standard economics says people behave rationally and they should behave rationally. Behavioral economics says people do not behave rationally, but they should behave rationally. Thus, while behavioral economics criticizes standard economics, they both agree that rationality is the normative criterion for evaluating individual behavior.
Keywords
- Behavioral economics,
- rationality,
- public policy
Disciplines
Publication Date
2022
Editor
Rosemarie Fike, Stefanie Haeffele, and Arielle John
Publisher
Rowman & Littlefield
Series
Economy, Polity and Society
ISBN
9781786614858
Citation Information
Mario J Rizzo. "Irrationality Is Not Unreasonable" LanhamNudging Public Policy: Examining the Benefits and Limitations of Paternalistic Public Policies (2022) p. 11 - 22 Available at: http://works.bepress.com/mario_rizzo/72/