Economic rationality entails making decision that maximise ones utility. Whereas in psychology, rationality consist of weighing up facts and information to find the best outcome or help solve certain problems. It is believed in psychology, that our brains are split into two different parts when we are put into a situation where we need to make a decision. One part of the brain focuses on emotion and the other focuses on acting rationally. The emotional side makes choices that make us the most content and satisfied. The rational side of the brain makes choices that suit our best interest. For example, an individual deciding whether to buy junk food would have the rational side of his brain choice to avoid it due to it being unhealthy while the emotional side would choice to buy it as it maximises ones …show more content…
As I mentioned earlier psychologist disagree with the notion that individuals are always rational with every choice they make and other aspects such as emotion will have an impact. As mentioned by Simon (1986 p.209) ‘psychology on the other hand as always been concerned with both the irrational and the rational aspects of behaviour’. The one thing that diverges psychologist perceptions of rationality to an economist’s view of rationality is that psychologist understands that individuals cannot always be 100% rational and from time to time will make decisions that can be considered as irrational. Therefore, in this respect the assumptions of a decision making model do in fact matter as the assumptions characterised with the theory or model will impact the result or outcome and lowers the predictive power that the model enables us to