Looking under the hood: Exploring assumptions and finding behavioral economics

Mark Pingle ()

Journal of Economic Behavior & Organization, 2010, vol. 73, issue 1, 73-76

Abstract: Cognitive scarcity is a fundamental economic fact, but the standard maximization assumption abstracts from this fact. Much of behavioral economics can be framed as "exploring the maximization assumption." By applying the tools of behavioral economics to explore this important assumption, we can learn why presuming maximization works, when it works, even when we know the assumption is not accurately descriptive. We can also learn why theory fails when the assumption does not proximately hold.

Keywords: Bounded rationality; Cognitive scarcity; Deliberation cost; Transactions cost; Assumptions (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167-2681(09)00271-6
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:73:y:2010:i:1:p:73-76

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().