Reasonableness in Legal Sense and Rationality in Economic Sense: Human Decision-Making and Behavior
Overview
This essay examines whether human beings are reasonable in a legal sense and rational in an economic sense, exploring the concept of rational choice theory and how economists model human decision-making. It analyzes the assumptions underlying neoclassical economics that treat individuals as self-interested and highly rational actors who weigh costs against benefits when making economic decisions.
What this essay covers
- Introduction and definition of reasonableness versus rationality
- Rational choice theory and its assumptions in microeconomic modeling
- Neoclassical economic framework and self-interest assumptions
- Supply and demand theory and rational consumer behavior
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Are people reasonable in the lawyer’s sense and rational in an economist’s sense?
The behavior of human beings is a subject that is complex and decisions are made daily affecting each person. The daily decisions made affect tomorrow and therefore, it is vital to ensure that they are made reasonably and rationally. Both concepts lead to people creating a list of preferences. The rational choice theory posits that the well-ordered preferences we make are transitive (Slovic. and White, 2016, 96). Chaos theory states that no matter how small the decision a person makes can be, the consequences have the potential to be substantial. Economics is the science that describes the behavior of human beings as a relationship between scarce and given means that have alternative uses. This essay attempts to show whether people are reasonable in a lawyer’s sense, rational in an economist’s sense and if it matters in each case.
Economists make assumptions that every person is rational. The term ration is of Latin origin rationality is that it relates to being consistent with reason. Being rational also means a state to make sound judgment and good sense. It could also mean the quality to be consistent based on logic. A rational behavior is a consistent process of both rational thought and inference (Bancroft, 2017, 167). Individuals who are rational try their level best to fulfill their goals using available opportunities.