RATIONALITY FOR ECONOMISTS

Daniel McFadden

Rationality is a complex behavioral hypothesis that can be parsed into
statements about perceptions, beliefs, learning and protocols for
problem-solving and decision-making.  This paper looks at the role of
various aspects of rationality in economic anlaysis, and the
plausibility of "the market makes the person" arguments for
rationality.  It looks at behavior theory, and some of the evidence
from behavioral experiments, to speculate on the plausibility of
different levels of "rationality," and suggests some areas where
further experimentation may be fruitful.