> My just comment is that we should not use "irrational expectations" > term in this discuss, because nobody, for sure know the > difference between rationality and irrationality of human beigns. > santosh
Economic rationality is different in meaning from psychological rationality. Economic rationality consists of just two things: 1. Economizing: minimize costs and maximize benefits. 2. Consistency: if A is preferred to B and B to C, then A is preferred to C. This transitivity applies only at a moment in time. Economic rationality does not judge ends. It is about consistency of ends and about the means to ends. Economic rationality also does not judge beliefs. Hence, one may be out of touch with reality yet be economically rational. Fred Foldvary ===== [EMAIL PROTECTED] __________________________________________________ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
