A popular 2008 book whose title suggests this assumption is unsound illustrates its limitations using an experiment involving Lindt truffles and Hershey kisses to illustrate the "zero price effect"; that book by Dan Ariely is titled for "predictably" violating it. A distinct
A popular 2008 book whose title suggests this assumption is unsound illustrates its limitations using an experiment involving Lindt truffles and Hershey kisses to illustrate the "zero price effect"; that book by Dan Ariely is titled for "predictably" violating it. A distinction between "substantive" and "procedural" forms of this assumption was introduced by an economist who argued that limitations on it cause actors to aim towards an acceptability threshold, a process called (*) "satisficing." The key insight of a 1988 paper by Kevin Murphy and Gary Becker was incorporating assumption into understanding addiction. Herbert Simon described a "bounded" form of this assumption, which lends its name to standard economic "choice theory." For 10 points, identify this common assumption that agents take into account all information and maximize their utility.
A popular 2008 book whose title suggests this assumption is unsound illustrates its limitations using an experiment involving Lindt truffles and Hershey kisses to illustrate the "zero price effect"; that book by Dan Ariely is titled for "predictably" violating it.
rationality [accept basically anything involving the word rational or agents/people behaving rationally; accept rational choice theory; accept anything involving utility maximization until "substantive" is read; accept homo economicus]