Decision, Contract and Emotion: Some Economics for a Complex and Confusing World

This essay illustrates that if Savage's small world assumption is relaxed, one can construct a theory of bounded rationality that incorporates some of the insights from recent work in cognitive psychology. The theory can be used to explain why contracts are incomplete and the existence of endowment effects in exchange.

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Year of publication:	1996-01-01
Authors:	MacLeod, W. Bentley
Institutions:	Department of Economics, Boston College
Subject:	Bounded rationality \| decision theory \| complexity

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Extent:	application/pdf
Series:	Boston College Working Papers in Economics.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Boston College Working Papers in Economics Number 336. 26 pages
Classification:	D0 - Microeconomics. General ; J3 - Wages, Compensation, and Labor Costs
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005074107