Rational Fools: A Critique of the Behavioral Foundations of Economic Theory
Author(s)
Sen, Amartya
Abstract
In Mathematical Physics, published in 1881 Edgeworth asserted that the “first principle of Economics is that every agent is actuated only by self-interest. This view of man has been a persistent one in economic models and the nature of economic theory seems to have been much influenced by this basic premise. Sen examines some of the problems that have arisen from this conception of human beings and the need to accommodate commitment as part of behavior. Commitment does not presuppose reasoning but it does not exclude it; in fact insofar as consequences on others have to more clearly understood and assessed in terms of one’s values and instincts, the scope for reasoning may well expand.
