The Limits of Rationality
edited by Karen Schweers Cook and Margaret Levi
University of Chicago Press, 1990
Cloth: 978-0-226-74238-0 | Paper: 978-0-226-74239-7 | Electronic: 978-0-226-74241-0
ABOUT THIS BOOKTABLE OF CONTENTS

ABOUT THIS BOOK

Prevailing economic theory presumes that agents act rationally when they make decisions, striving to maximize the efficient use of their resources. Psychology has repeatedly challenged the rational choice paradigm with persuasive evidence that people do not always make the optimal choice. Yet the paradigm has proven so successful a predictor that its use continues to flourish, fueled by debate across the social sciences over why it works so well.

Intended to introduce novices to rational choice theory, this accessible, interdisciplinary book collects writings by leading researchers. The Limits of Rationality illuminates the rational choice paradigm of social and political behavior itself, identifies its limitations, clarifies the nature of current controversies, and offers suggestions for improving current models.

In the first section of the book, contributors consider the theoretical foundations of rational choice. Models of rational choice play an important role in providing a standard of human action and the bases for constitutional design, but do they also succeed as explanatory models of behavior? Do empirical failures of these explanatory models constitute a telling condemnation of rational choice theory or do they open new avenues of investigation and theorizing?

Emphasizing analyses of norms and institutions, the second and third sections of the book investigate areas in which rational choice theory might be extended in order to provide better models. The contributors evaluate the adequacy of analyses based on neoclassical economics, the potential contributions of game theory and cognitive science, and the consequences for the basic framework when unequal bargaining power and hierarchy are introduced.

TABLE OF CONTENTS

Acknowledgments

Introduction: The Limits of Rationality

PART I THE THEORY OF RATIONAL CHOICE

1 When Rationality Fails

Comment: What Might Rationality Fail to Do?

2 Rational Choice and the Framing of Decisions

3 Choice Under Uncertainty: Problems Solved and Unsolved

Comment: Should a Rational Agent Maximize Expected Utility?

4 Rational Choice in Experimental Markets

Comment: Individual Decision Making versus Market-Level Predictions: The Applicability of Rational Choice Theory

PART II PREFERENCE FORMATION AND THE ROLE OF NORMS

5 De Gustibus Non Est Disputandum

Comment: De Gustibus Non Est Explanandum

6 Cooperation and Rationality: Notes on the Collective Action Problem and Its Solutions

Comment: On the Inadequacy of Game Theory for the Solution of Real-World Collective Action Problems

7 Norm-Generating Structures

Comment: An Alternative Approach to the Generation and Maintenance of Norms

PART III INSTITUTIONS

8 Reason and Rationality

Comment: Stinchcombe's "Reason and Rationality"

9 Managerial Dilemmas: Political Leadership in Hierarchies

Comment: Applying Rational Choice Theory: The Role of Leadership in Team Production

10 The Social Evolution of Cooperation

Comment: On Russell Hardin's "The Social Evolution of Cooperation"

11 Institutions and Their Consequences for Economic Performance

12 A Logic of Institutional Change

List of Contributors

Index