Are People Rational
Everyday people make decisions that affect themselves and other parties. This essay will discuss if people are rational and if people are reasonable. In particular will be focusing on whether people are rational in the economist’s sense, and, reasonable in the lawyer’s sense and whatever the outcome, does it matter? It is an important matter as peoples actions have effects, externalities on others, on third parties and it is significant to understand why people act the way they do and comprehend how this behavior is useful for lawyers and economists in their professions.
In order to begin discussing whether people are rational a clear definition is needed. Being rational is classified as being consistent with or based on or using reason, rational behavior is a process of rational inference and rational thought. (Simon 1986). Rationality is the state of having good sense and sound judgment. It is the quality of being consistent with or based on logic (Gibbons 1992). As a term, it is related to the idea of reason.Economists usually assume that people are rational. Rational people systematically and purposely do the best they can to achieve their objective, given the available opportunities (Sugden 1991). The Rational choice theory, also known as rational action theory, is a framework for understanding and often formally modeling social and economic behavior. Gibbons (1992) describes it as the dominant theoretical paradigm in microeconomics. He continues to explain that it is also “central to modern political science and is used by scholars in other disciplines such as sociology and philosophy.” The 'rationality' described by rational choice theory is different from the everyday and most philosophical uses of rationality. 'Rationality' means in colloquial language 'sane' or 'in a thoughtful clear headed manner'. In Rational Choice Theory, 'rationality' simply means that a person reasons before taking an action. Within economics, a person balances costs against
In order to begin discussing whether people are rational a clear definition is needed. Being rational is classified as being consistent with or based on or using reason, rational behavior is a process of rational inference and rational thought. (Simon 1986). Rationality is the state of having good sense and sound judgment. It is the quality of being consistent with or based on logic (Gibbons 1992). As a term, it is related to the idea of reason.Economists usually assume that people are rational. Rational people systematically and purposely do the best they can to achieve their objective, given the available opportunities (Sugden 1991). The Rational choice theory, also known as rational action theory, is a framework for understanding and often formally modeling social and economic behavior. Gibbons (1992) describes it as the dominant theoretical paradigm in microeconomics. He continues to explain that it is also “central to modern political science and is used by scholars in other disciplines such as sociology and philosophy.” The 'rationality' described by rational choice theory is different from the everyday and most philosophical uses of rationality. 'Rationality' means in colloquial language 'sane' or 'in a thoughtful clear headed manner'. In Rational Choice Theory, 'rationality' simply means that a person reasons before taking an action. Within economics, a person balances costs against