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Household Behavior and Consumer Choice
Household Behavior and Consumer Choice

...  What kind of a job to work at In essence, household members must decide how much labor to supply. The choices they make are affected by  Availability of jobs  Market wage rates  Skills they possess ...
Implications of Causal-Realist Preference Theory on Expected Utility
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... structure of preferences and then in that light explain and analyze Expected Utility Theory, and then examine what one can say about people’s behavior under conditions of risk. We will use the standard definition of risk, simply, actions where the future is undetermined from the point of view of the ...
12455_marshallian
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... • It explains phenomenon that price decreases with an increase in supply. • It also explains divergence between value in use and value in exchange. Sunshine has great value in use, but has no value-in-exchange. • It is the basis of progressive taxation. • It is of importance in determining the basic ...
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Induction and Decision Trees
Induction and Decision Trees

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Under-Consumption and the Accumulation Motive
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Economy`s Tension - George Mason University
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What Is Economics? - Hoover Institution
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The Sea Battle Tomorrow: The Identity of Reflexive Economic Agents
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expectimax search - inst.eecs.berkeley.edu
expectimax search - inst.eecs.berkeley.edu

... to real numbers that describe an agent’s preferences  Where do utilities come from?  In a game, may be simple (+1/-1)  Utilities summarize the agent’s goals  Theorem: any set of preferences between outcomes can be summarized as a utility function (provided the preferences meet ...
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Second-Order Economics as an Example of Second

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reappraisal of rational choice theory - Interdisciplinary Description of
reappraisal of rational choice theory - Interdisciplinary Description of

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Rational choice theory



Rational choice theory, also known as choice theory or rational action theory, is a framework for understanding and often formally modeling social and economic behavior. The basic premise of rational choice theory is that aggregate social behavior results from the behavior of individual actors, each of whom is making their individual decisions. The theory therefore focuses on the determinants of the individual choices (methodological individualism).Rational choice theory then assumes that an individual has preferences among the available choice alternatives that allow them to state which option they prefer. These preferences are assumed to be complete (the person can always say which of two alternatives they consider preferable or that neither is preferred to the other) and transitive (if option A is preferred over option B and option B is preferred over option C, then A is preferred over C). The rational agent is assumed to take account of available information, probabilities of events, and potential costs and benefits in determining preferences, and to act consistently in choosing the self-determined best choice of action.Rationality is widely used as an assumption of the behavior of individuals in microeconomic models and analyses and appears in almost all economics textbook treatments of human decision-making. It is also central to some of modern political science, sociology, and philosophy. A particular version of rationality is instrumental rationality, which involves seeking the most cost-effective means to achieve a specific goal without reflecting on the worthiness of that goal. Gary Becker was an early proponent of applying rational actor models more widely. Becker won the 1992 Nobel Memorial Prize in Economic Sciences for his studies of discrimination, crime, and human capital.
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