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In economics, rationalization is an attempt to change a pre-existing ad hoc workflow into one that is based on a set of published rules. There is a tendency in modern times to quantify experience, knowledge, and work. Means–end (goal-oriented) rationality is used to precisely calculate that which is necessary to attain a goal.
In general usage, one is said to be rational if one is sane or lucid. [15] In economics, rationality means that an economic agent specifies, or acts as if he implicitly specifies, a way to characterize his or someone's well-being, and then takes into account all relevant information in making choices so as to optimize that well-being.
The terms "rationality", "reason", and "reasoning" are frequently used as synonyms. But in technical contexts, their meanings are often distinguished. [7] [12] [1] Reason is usually understood as the faculty responsible for the process of reasoning. [7] [14] This process aims at improving mental states. Reasoning tries to ensure that the norms ...
The concept of economic rationality arises from a tradition of marginal analysis used in neoclassical economics. The idea of a rational agent is important to the philosophy of utilitarianism, as detailed by philosopher Jeremy Bentham's theory of the felicific calculus, also known as the hedonistic calculus.
Imagine there's a game where one person is placed in a room and assigned the role of the "sender." A second person in a different room is assigned the role of "receiver." The sender is given $20 ...
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
The term "economic rationalism" is commonly used in criticism of free-market economic policies as amoral or asocial. In this context, it may be summarised as "the view that commercial activity... represents a sphere of activity in which moral considerations, beyond the rule of business probity dictated by enlightened self-interest , have no ...
Rationalization (economics), an attempt to change an ad hoc workflow into one based on published rules; also, jargon for a reduction in staff Rationalisation (mathematics) , the process of removing a square root or imaginary number from the denominator of a fraction