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June 1, 1995

[SSJ: 12] RE Why NOT Rational Choice?

From: Anil Khosla
Posted Date: 1995-06-01

I would agree with Miyake that what is problematic with the recent direction that economics is taking is the excessive use of maths. It seems that economists are increasingly forgetting that economics is a social rather than exact science. The use of maths in economics is increasingly becoming an end in itself rather than a tool. It is true that mathematical presentations can usually be "interpreted" in common sense terms but that does not necessarily imply that such explanations are always useful.

Rational choice, by its very nature, is bounded by the set of information available to an individual economic actor. To believe that each and every actor has a similarly wide (perfect information?) set of information is probably stretching the argument too far. Individuals vary in terms of their perceptions of and ability to collate and analyze information. In this sense, it should be more appropriate to try to find a minimum common information set that most of the individual economic agents would take into account in making their choices. With the spread of education and means of information processing, this set would be enlarged but perhaps still bounded. Despite the elegance of presentation provided by rational choice models, I would like to see more realism in economic science.

ak
============================================================================= Anil Khosla
Centre for Japanese and Korean Studies
Leiden University
Arsenaalstraat 1 Tel: +31 (0)71 27 22 13
P.O. Box 9515 2300RA Leiden Fax: +31 (0)71 27 22 15
The NetherLands e-Mail: Khosla[atx]rullet.leidenuniv.nl
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