The highly stylized rationality assumptions of neo-classical economics have always been a point of controversy. Neo-classical economists do not consider these assumptions as problematic – they treat deviations from standard rationality as ´cognitive anomalies´ at the level of individual actors, irrelevant for aggregate outcomes. In fact, the last decades have witnessed a strong increase in the use of such approaches, inspired by mainstream economics or more recently, the physical sciences and chaos-complexity theory. The advantages of such a “thin” or “strong” conceptualization of rationality are evident: the resulting models build on a parsimonious set of assumptions and remain highly tractable.
This standard rational choice approach is challenged by proponents of an alternative approach, who emphasize the need to expand our concept of rationality. Building on evidence collected by cognitive neuroscientists, behavioral economics, evolutionary psychology, sociology and related fields, proponents of this approach suggest that rather than treating deviations from a strong rationality model as idiosyncratic cognitive anomalies of individuals, they should be conceived as systematic reflections and hence predictable characteristics of human nature. The resulting “social rationality” approach emphasizes the ‘resourcefulness’ of humans, and arrives at surprising hypotheses and insights. These are sometimes at odds with the predictions of standard rational choice models, and sometimes can be incorporated into it. Social rationality extensions of the actor model, e.g. through ‘fast and frugal’ heuristics, the incorporation of goal framing, loss aversion and reciprocity effects, or the assumption that actors derive utility from punishment were successfully applied to explain cooperative vs. selfish behavior, e.g. the decision to free-ride, or to allocate sanctions for
non-cooperation, and open new fields of application for the rationality-oriented framework. While correcting and refining the stylized actor assumptions of the standard model, orthodox rational choice scholars criticize these extensions as idiosyncratic, unnecessary extensions of the theoretical core of the approach. They argue that the problems resulting from adding complexity by far outweigh the potential benefits.
During this one-day symposium, we will take stock of the most recent theoretical developments and empirical findings relating to this debate. We welcome both theoretical and empirical, both fundamental and applied contributions.
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