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on Neuroeconomics |
| By: | E. Khalil |
| Abstract: | Advocates of natural selection usually regard rationality as redundant, i.e., as a mere linguistic device to describe natural selection. But this “Redundancy Thesis” faces the anomaly that rationality differs from natural selection. One solution is to conceive rationality as a trait selected by the neo-Darwinian mechanism of natural selection as . But this “Rationality-qua-Trait Thesis” faces a problem as well: Following neo-Darwinism, one cannot classify one allele of, e.g., eyesight as better than another without reference to constraints—while one can classify rationality as better than irrationality irrespective of constraints. Therefore, natural selection cannot be a trait. This leads us to the only solution: Rationality is actually a method that cannot be reduced to a trait. This “Rationality-qua-Method Thesis” lays the ground for alternative, developmental views of evolution. |
| Keywords: | Redundancy Thesis, rationality anomaly, Rationality-qua-Trait Thesis, incoherence problem, Rationality-qua-Method Length 31 pages |
| JEL: | D0 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2006-22&r=neu |
| By: | Itzhak Gilboa (Tel-Aviv University, HEC, and Cowles Foundation, Yale University); Andrew Postlewaite (University of Pennsylvania); David Schmeidler (Tel-Aviv University and Ohio State University) |
| Abstract: | Economic theory reduces the concept of rationality to internal consistency. The practice of economics, however, distinguishes between rational and irrational beliefs. There is therefore an interest in a theory of rational beliefs, and of the process by which beliefs are generated and justified. We argue that the Bayesian approach is unsatisfactory for this purpose, for several reasons. First, the Bayesian approach begins with a prior, and models only a very limited form of learning, namely, Bayesian updating. Thus, it is inherently incapable of describing the formation of prior beliefs. Second, there are many situations in which there is not sufficient information for an individual to generate a Bayesian prior. It follows that the Bayesian approach is neither sufficient not necessary for the rationality of beliefs. |
| Keywords: | Decision making, Bayesian, Behavioral Economics |
| JEL: | B4 D8 |
| Date: | 2004–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:07-001&r=neu |