An exploratory analysis of composite choices: Weighing rationality versus irrationality

Bijou Yang Lester

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2011, vol. 40, issue 6, 949-958

Abstract: Humans are engineered neurologically to make rational and irrational choices. This paper introduces a new paradigm for decision making – a composite choice model – in which economic agents are constantly weighing rationality versus irrationality when encountering options. In an exploratory, deterministic, two-period model, an assumption of a two-way cross-embedment (i.e., a two-way interaction between the rational and irrational components) results in a paradoxical phenomenon, an outcome of either tending toward bliss or abyss at the end of the first period. This implies, for instance, a psychological struggle between two selves within the mind. The paradigm proposed is compared to the dual-process theories recently developed by the cognitive sciences. Future research will explore implications for public policy design and implementation.

Keywords: Composite choices; Inclination to rationality; Irrationality; Cross-embedment; Abysmal trap (search for similar items in EconPapers)
JEL-codes: D00 D11 D90 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:40:y:2011:i:6:p:949-958

DOI: 10.1016/j.socec.2011.08.024

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