Normative Rationality After Behavioural Economics: What is Left?
It may appear that behavioural economics has significantly weakened the usefulness of the orthodox economics notion of rationality. On the other hand, many behavioural economists either explicitly or implicitly use that notion as a normative or prescriptive standard in policy studies. My claim is that this makes no sense. Orthodox rationality is purely formal, a modelling strategy, and not a true rationality standard. The only way to understand whether behaviour is rational to understand the meaning people give to their problem-situations, the reasons for their actions, and whether they are able to achieve a satisfactory solution to their problems. There is no universal formula for rationality and therefore no easy prescriptive standard for economists and policy-makers.
Meet our speaker and chair
Mario J. Rizzo is Professor of Economics, the Director of the Foundations of the Market Economy Program, and the Co-Director of the Classical Liberal Institute, at New York University. He is the co-author of Escaping Paternalism and of The Economics of Time and Ignorance. He has published extensively in the history of economic thought, law-and-economics, classical liberalism, and behavioral economics. He is a member of the editorial board of Behavioural Public Policy and of the advisory board of the LSE seminar in classical liberalism.
Adam Oliver is Professor of Behavioural Public Policy in the Department of Social Policy. He is a pioneer in the field of behavioural public policy, and has helped to develop a whole new field of public policy – behavioural public policy – that focusses on how the findings of behavioural economics specifically, and behavioural science more broadly, can be linked to public policy concerns. Oliver, together with George Akerlof and Cass Sunstein, is the Founding Editor of the journal, Behavioural Public Policy, Founder of the Annual International Behavioural Public Policy Conference, and Founding Chair of the International Behavioural Public Policy Association. He is the world’s first Professor of Behavioural Public Policy.
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