As far as I can tell, "economic rationality" simply means that as the price of an item goes up, the quantity demanded goes down (holding income constant). if true, so waht?
On Fri, Jun 12, 2009 at 3:13 PM, Max Sawicky <[email protected]> wrote: > Haven't read the paper, but the title made me laugh. > > > > 2008 ARROW PRIZE FOR SENIOR ECONOMISTS > > "The Market: Catalyst for Rationality and Filter of Irrationality" > > http://www.bepress.com/bejeap/vol8/iss1/art47/ > > John A. List, University of Chicago and NBER > Daniel L. Millimet, Southern Methodist University > > The B.E. Journal of Economic Analysis & Policy, www.bepress.com/bejeap > > Assumptions of individual rationality and preference stability provide > the foundation for a convenient and tractable modeling approach. While > both of these assumptions have come under scrutiny in distinct > literatures, the two lines of research remain disjointed. This study > begins by explicitly linking the two literatures while providing > insights into whether market experience mitigates one specific form of > individual rationalityùconsistent preferences. Using field > experimental data gathered from more than 800 experimental subjects, > we find evidence that the market is a catalyst for this type of > rationality. The study then focuses on aggregate market outcomes by > examining empirically whether individual rationality of this sort is a > prerequisite for market efficiency. Using a complementary field > experiment, we gathered data from more than 380 subjects of age 6-18 > in multi-lateral bargaining markets at a shopping mall. We find that > our chosen market institution is a filter of irrationality: even when > markets are populated solely by irrational buyers, aggregate market > outcomes converge to the intersection of the supply and demand > functions. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante.
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