How Bayesian Rationality Fails and Critical Rationality Works

Max Albert

Homo Oeconomicus: Journal of Behavioral and Institutional Economics, 2017, vol. 34, issue 4, No 5, 313-341

Abstract: Abstract The paper characterizes Bayesianism and critical rationalism as alternative recipes for judgment and decision making. It evaluates these alternatives against the background of the claim that following the respective recipe promotes the decision maker’s interests. Regarding Bayesian rationality, the claim is rejected, both for large and small worlds. Regarding critical rationality, the claim is accepted. It is argued that the critical-rationalist recipe works because it successfully exploits the laws governing human decision makers’ environment. The Bayesian recipe, however, is “too thin” to serve a decision maker’s interests.

Keywords: Uncertainty; Rationality; Bayesianism; Critical rationalism (search for similar items in EconPapers)
JEL-codes: D01 D03 D80 D81 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s41412-017-0062-3

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