The government economic agenda in a society of unequally rational individuals

Pavel Pelikan

MPRA Paper from University Library of Munich, Germany

Abstract: What economic roles, if any, should government play? This is still an incompletely analyzed issue that different individuals – depending on their ideologies, rent-seeking opportunities, and analytical abilities – may answer very differently. To advance its analysis, this paper recognizes that human rationality (as empirically testable cognitive abilities) is bounded unequally across individuals, and is therefore a unique scarce resource that markets and government allocate in significantly different ways. The results conflict with ideologies of both socialism and classical liberalism, but agree with two puzzles of recent economic history and with ideological compromises in actual economic policies.

Keywords: unequally bounded rationality; rationality-allocation; markets; government; economic policies (search for similar items in EconPapers)
JEL-codes: A10 D02 D61 I0 O10 P51 (search for similar items in EconPapers)
Date: 2008-11-11, Revised 2009-12-06
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:19127

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