Imperfectly rational choice: Rationality as the result of a costly activity

In identifying characteristics of people and of their choices that determine their degree of rationality — the nature and incidence of imperfect rationality — this paper suggests that there are often observable criteria by which to judge the applicability of the rational choice model to a particular market or choice situation. Clearer understanding will cut both ways, bringing more of non-economic behavior into the productive domain of rational choice analysis while at the same time showing economic, and non-economic, behavior that is badly modeled by the assumption of rational decision makers.