Not Rational Utility Maximisers

From azizonomics
January 17, 2013 - 1:03pm

One cornerstone of neoclassical economic thought is the assumption in microeconomics (and microfounded macroeconomics) that humans behave as “rational utility maximisers”. Yet this assumption is increasingly outdated. Empirical findings in behavioural economics show that the neoclassical assumption of utility maximisation has very little basis in reality. First, it is crucial to define what we mean by utility […]

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