Volume 26, Issue 1 (Spring 2021)
JPBUD 2021, 26(1): 169-205 |
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Mohammadi Alamuti M. (2021). The Concept of Rational Behavior and the Problem of Learning from Error in Neoclassical Economics: With a view of the Austrian’s Critiques. JPBUD. 26(1), 169-205. doi:10.52547/jpbud.26.1.169
URL: http://jpbud.ir/article-1-1968-en.html
URL: http://jpbud.ir/article-1-1968-en.html
Institute for management and planning studies, Tehran, Iran. , m.alamuti@imps.ac.ir
Abstract: (3075 Views)
The concept of rational behavior has a significant role in economics and its analysis of market economy and general equilibrium. On the other hand, there exists a logical relation between limits of rationality and learning from error. With explaining the concept of rational behavior in the neoclassical economics and its relation with the rational expectation hypothesis this article addresses the following two questions: First, has the idea of learning from error played a role in the formation of neoclassical concept of rational behavior? If not, secondly, can the idea play a role in improving the meaning of rational behavior in economics? In response to these question, the article reviews the following discussions: (a) the neoclassical concept of rational behaviors is reviewed and the critiques of behavioral economics and the theories of choice under uncertainty are discussed, (b) the rational usage of information and its relation with the meaning of rational behavior are examined, and in this context the importance of the idea of learning from error is explored, and (c) Karl Popper’s theory of rationality as openness to criticism and its consequence for the idea of learning from error in terms of conjecture and refutation will be discussed. The article finally uses the Austrian economists’, i.e. Hayek and Krizner, critiques regarding the neoclassical concept of rational behavior in order to show that Popper’s theory of rationality can improve the concept of rational behavior in economics.
Keywords: Neoclassical Economics, Rational Behavior, Behavioral Economics, Openness to Criticism, Learning from Error, General Equilibrium, Austrian School, Karl Popper.
Type of Study: Applicable |
Subject:
public economics
Received: Jan 25 2021 | Accepted: Jun 16 2021 | ePublished: Sep 08 2021
Received: Jan 25 2021 | Accepted: Jun 16 2021 | ePublished: Sep 08 2021
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