Article

Economic Rationality

Paul. Weirich

in The Oxford Handbook of Rationality

Published in print February 2004 | ISBN: 9780195145397
Published online September 2009 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780195145397.003.0020
 Economic Rationality

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This article examines three competing views entertained by economic theory about the instrumental rationality of decisions. The first says to maximize self-interest, the second to maximize utility, and the third to “satisfice,” that is, to adopt a satisfactory option. Critics argue that the first view is too narrow, that the second overlooks the benefits of teamwork and planning, and that the third, when carefully formulated, reduces to the second. This article defends a refined version of the principle to maximize utility. It discusses generalizations of utility theory to extend it to nonquantitative cases and other cases with nonstandard features. The study of rationality as it bears on law is typically restricted to the uses made of the notion of rationality by the “law and economics movement.” Legal economists accept the traditional economic assumption that rational agents seek primarily to maximize their personal utility.

Keywords: economic theory; rationality; self-interest; utility theory; law and economics movement

Article.  7616 words. 

Subjects: Philosophy ; Epistemology ; Moral Philosophy ; Philosophy of Science

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