Naturalized Rationality, Evolutionary Psychology and Economic Theory

Izhak Aharon, Arnon Cahen, Yakir Levin

Research output: Contribution to journalArticlepeer-review

Abstract

The rationality assumed by mainstream Rationalistic Economics (RE) and the irrationality purportedly revealed by Behavioral Economics (BE) are like a Hegelian “thesis” and “antithesis.” Well aware of this conflict, proponents of RE have pursued several strategies to reconcile RE’s rationalistic thesis with the ample evidence supporting BE’s irrationalistic anti-thesis. Yet, none of these attempts appear satisfactory, which casts serious doubt on the possibility of reconciling RE with BE. Recently, Robert Aumann, 2005 Economics Nobel Laureate, has suggested a novel approach to this conflict, indeed, a new paradigm (Rule-Rationalism, or RR), which is supposed to synthesize RE and BE in terms of an innovative evolution-grounded notion of rationality. One aim of this paper is to cast further doubt on the possibility of reconciling RE with BE by showing that Aumann’s suggested non-standard reconciliation fails. Another, related, aim is to show that RR does not genuinely present an alternative to RE and standard BE, but, rather, falls well within the bounds of the latter. Yet another aim is to address two fundamental issues in philosophy and psychology that RR involves—namely, the possibility of naturalizing practical rationality in evolutionary terms, and the scope of evolutionary explanations in psychology and economics. These aims are interwoven, as is reflected in the structure of
the paper’s central argument. We begin by arguing that practical rationality cannot be naturalized in evolutionary terms. Based on this we then argue that RR fails to synthesize RE and standard BE, yet that it may still be a new and better paradigm than either one of them. Next, we argue that evolutionary explanations in psychology and economics are of a limited scope. Based on this, we then conclude the paper by arguing that RR does not form a new paradigm in economics after all, and is, instead, tantamount to a call for evolutionary explanations in BE (when possible).
Original languageEnglish
Pages (from-to)39-72
Number of pages34
JournalJournal of Cognition and Neuroethics
Volume1
Issue number1
StatePublished - 2013

Keywords

  • Aumann
  • Rationalistic Economics
  • Behavioral Economics
  • Neuroeconomics
  • practical rationality
  • act rationality
  • rule rationality
  • naturalized rationality
  • intentional agency
  • Evolutionary Psychology
  • Human Behavioral Ecology

Fingerprint

Dive into the research topics of 'Naturalized Rationality, Evolutionary Psychology and Economic Theory'. Together they form a unique fingerprint.

Cite this