The economist s advice to society rests largely on a picture of citizens as infinitely rational beings, shrewd, calculating and above all consistent in their behaviour. But as the last thirty years of economic experiments and field work has revealed, humans are far from perfectly consistent. On the contrary, choices and preferences often seem highly sensitive to context. Systematic deviations from rationality anomalies are widespread and they have been well-documented in the laboratory and the field. What then can the economist say about desirable public policies?
Bounded Rationality...
The economist s advice to society rests largely on a picture of citizens as infinitely rational beings, shrewd, calculating and above all consisten...