Pranab Bardhan and Christopher Udry

in Development Microeconomics

Published in print May 1999 | ISBN: 9780198773719
Published online November 2003 | e-ISBN: 9780191595929 | DOI:

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Lists some of the issues explored through micro models in subsequent chapters of the book. Also discusses the general economic methodology followed throughout the book. In particular, the assumption of maximization in household behaviour and its place in the micro analysis of farm households is examined. While there is substantial evidence of peasant rationality, there is no denying the fact that individual decision‐making is influenced by social norms and the evidence that it is prone to errors and biases. The assumption of rationality is best seen as a not untenable working hypothesis or benchmark.

Keywords: decision‐making; economic methodology; economic rationality; farm households; household behaviour; maximization; micro models; peasant rationality; social norms

Chapter.  2663 words. 

Subjects: Economic Development and Growth

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