Rationality and uncertainty

Andrew Postlewaite, David Schmeidler

Research output: Contribution to journalArticlepeer-review

Abstract

Experimental psychologists and economists construct an individual or interactive decision situation in the laboratory. They find non-negligible differences between the observed behavior of participants and the theoretically implied behavior. We refer here to the expected utility theory and to strategic equilibrium in non-cooperative game theory. We comment on the question whether rationality, implies these theoretical behaviors and whether the non-negligible differences as above imply that participants in experiments are irrational. We also comment on the relation between rationality and consistency, in particular in situations of uncertainty.

Original languageEnglish
Pages (from-to)289-294
Number of pages6
JournalRivista Internazionale di Scienze Sociali
Issue number3
StatePublished - 2012

Keywords

  • Bayesian
  • Behavioral Economics
  • Biases
  • Decision making
  • Uncertainty

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