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Convergence Of Behavioral Economics And Orthodox Economic Theory

Table 1:

Rational Agent(orthodox economics) «Behavioral» Agent(behavioral economics)
Knows all alternatives and all their parameters. - There are too many alternatives to be elaborated.- Many parameters are hidden from the individual.
- Can compare and rank all alternatives in a consistent manner.- Knows clearly his preferences.- Has stable preferences. - It is difficult for the agent to evaluate and compare alternatives.- Agent does not always know what he wants.- Preferences are not stable.
Chooses the best ("optimal") option, maximizing utility. - Optimum is not always available.- Optimum does not always exist.- The choice can be emotional.- A non-rational choice, taking into account all the costs, may prove to be more beneficial than the optimal one.
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