Abstract

GOMES, Orlando. Rationality and Choice. Economia Global e Gestão [online]. 2007, vol.12, n.2, pp.53-71. ISSN 0873-7444.

The concept of rationality is one of the most debated and controversial notions that the economic science has to offer. The rational choice paradigm, which involves profit maximization and utility maximization behavior, may be questioned by an important number of studies that remind that the human choice process is not an error exempt process, that it does not ignore emotional factors and that it is not fulfilled outside a social context where interaction determines behavior. This text intends to characterize the way in which the economists work the notion of rational decision and applies some of their ideas to model the decision process. In particular, we build an exercise in which one considers the cognitive costs involved in the choice process and we make use of the discrete choice theory to exemplify how social interaction and stimuli like advertising determine consumption and utility trajectories.

Keywords : Rationality; Discrete Choice; Utility; Consumption Decisions.

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