Rational inefficiency: smart thinking, bounded rationality and the scientific basis for economic failure and success
Morris Altman ()
Chapter 2 in Handbook of Behavioural Economics and Smart Decision-Making, 2017, pp 11-42 from Edward Elgar Publishing
This Handbook is a unique and original contribution of over thirty chapters on behavioural economics, examining and addressing an important stream of research where the starting assumption is that decision-makers are for the most part relatively smart or rational. This particular approach is in contrast to a theme running through much contemporary work where individualsâ€™ behaviour is deemed irrational, biased, and error-prone, often due to how people are hardwired. In the smart people approach, where errors or biases occur and when social dilemmas arise, more often than not, improving the decision-making environment can repair these problems without hijacking or manipulating the preferences of decision-makers. This book covers a wide-range of themes from micro to macro, including various sub-disciplines within economics such as economic psychology, heuristics, fast and slow-thinking, neuroeconomics, experiments, the capabilities approach, institutional economics, methodology, nudging, ethics, and public policy.
Keywords: Economics and Finance (search for similar items in EconPapers)
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