Extending Behavioral Economics' Methodological Critique of Rational Choice Theory to Include Counterfactual Reasoning

John Davis

No 2018-02, Working Papers and Research from Marquette University, Center for Global and Economic Studies and Department of Economics

Abstract: This paper extends behavioral economics' realist methodological critique of rational choice theory to include the type of logical reasoning underlying its axiomatic foundations. A purely realist critique ignores Kahneman's emphasis on how the theory's axiomatic foundations make it more normative. I extend his critique to the theory's reliance on classical logic, which excludes the concept of possibility employed in the counterfactual reasoning. Nudge theory reflects this in employing counterfactual conditionals. This answers the complaint that the Homo sapiens agent conception ultimately reduces to a Homo economicus conception, and also provides grounds for treating Homo sapiens as an adaptive, non-optimizing, reflexive agent.

Keywords: problem of deduction; modal reasoning; counterfactual conditionals; nudge; reflexive agents (search for similar items in EconPapers)
JEL-codes: A12 B41 D90 J26 (search for similar items in EconPapers)
Date: 2018-08
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:mrq:wpaper:2018-02

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