This essay provides different perspectives on rationality within social science, especially in economics and psychology. Also, this essay uses different theories in economics and psychology to show what causes us to do what we do or why we make choices that we make. Bloome & Wilkinson (2012) define rationality as “people being open to others’ arguments and working toward consensus”. But what rationality really mean in simple definition? Rationality is being reasonable depending on our believes or facts to make a better decision.
According to Andrew (2013) “All economics models share the common assumption that individual behave rationally at all times and under all circumstances, seeking solely to further their own self-interest subject to …show more content…
Economics call this bounded rationality, humans can’t be rational all the time as there are many limitations for example, not enough information, some information are unreelable, there might be no time to make the right decisions as the brain takes times to process all the information. This shows that people don’t optimise their decisions but satisfice. One of popular economics Laureate Herbert Simon has established what bounded rationality is “bounded rationality -limited rationality- as a collective term for organisations’ and people’s cognitive limitations and simplified decision-making rule”. ( …show more content…
Then the brain tries to solve it or learn the new piece of information, this is where the rule of the thumb or heuristic helps the brain to process that information more easily and speed up the decision. Rule of thumb or heuristic usually work however, there are cases where it failed which was because of cognitive biases. A cognitive bias is a fault in the brain while thinking which influences people decisions making and thinking. There are many causes of cognitive biases for example, our emotions, motivation and environment can cause our brain to have limit and not able to process particle information. This is because our feelings or are surrounding can take away our attention which causes us to be irrational and make irrational choices. However, if we become aware that our brain made a mistake, we can correct it and make rational
According to Andrew (2013) “All economics models share the common assumption that individual behave rationally at all times and under all circumstances, seeking solely to further their own self-interest subject to …show more content…
Economics call this bounded rationality, humans can’t be rational all the time as there are many limitations for example, not enough information, some information are unreelable, there might be no time to make the right decisions as the brain takes times to process all the information. This shows that people don’t optimise their decisions but satisfice. One of popular economics Laureate Herbert Simon has established what bounded rationality is “bounded rationality -limited rationality- as a collective term for organisations’ and people’s cognitive limitations and simplified decision-making rule”. ( …show more content…
Then the brain tries to solve it or learn the new piece of information, this is where the rule of the thumb or heuristic helps the brain to process that information more easily and speed up the decision. Rule of thumb or heuristic usually work however, there are cases where it failed which was because of cognitive biases. A cognitive bias is a fault in the brain while thinking which influences people decisions making and thinking. There are many causes of cognitive biases for example, our emotions, motivation and environment can cause our brain to have limit and not able to process particle information. This is because our feelings or are surrounding can take away our attention which causes us to be irrational and make irrational choices. However, if we become aware that our brain made a mistake, we can correct it and make rational