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Experimental Economics Research Has Often Assumed That Humans Behave as Rational

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Essay

Experimental economics research has often assumed that humans behave as rational agents, always making choices that will maximize gains and minimize losses. What is problematic about this assumption from a psychological or neuroscientific perspective?


Definitions:

Family Farm

A farm owned and operated by a family, typically involving residential family members in its operations.

Barriers To Entry

Factors that make it difficult for new competitors to enter an industry, often protecting existing companies from competition.

Demand Curves

A graphical representation used in economics to show the relationship between the price of a product and the quantity of the product that consumers are willing and able to purchase at various prices.

Long Run

When all costs become variable costs and firms can enter or leave the industry.

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