Rational choice theory and Becker's model of random behavior
According to rational choice theory, rational consumers tend to maximize utility under a given budget constraints. This will be achieved if they choose a combination of goods that can satisfy their needs and provide the maximum level of utility. Gary Becker, on the other hand, imagines irrational co...
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Veröffentlicht in: | Megatrend revija : međunarodni časopis za primenjenu ekonomiju 2015, Vol.12 (2), p.45-59 |
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Sprache: | srp |
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Zusammenfassung: | According to rational choice theory, rational consumers tend to maximize utility under a given budget constraints. This will be achieved if they choose a combination of goods that can satisfy their needs and provide the maximum level of utility. Gary Becker, on the other hand, imagines irrational consumers who choose bundle on the budget line. As irrational consumers have an equal probability of choosing any bundle on the budget line, on average, we expect that they will pick the bundle lying at the midpoint of the line. The results of research in which artificial Becker's agents choose among more than two commodities, rational choice theory is small and more than two budget/price situations show that the percentage of agents whose behavior violate. Adding some factors to Becker's model of random behavior, experimenters can minimize these minor violations. Therefore, rational choice theory is unfalsifiable. The results of our research have confirmed this theory. In addition, in the paper we discussed about explanatory value of rational choice theory in specific circumstances (positive substitution effect) and we concluded that the explanatory value of rational choice theory was significantly reduced in specific cases. |
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ISSN: | 1820-3159 |
DOI: | 10.5937/MegRev1502045K |