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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 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 ...
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 ...
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 ...
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. [citation needed] Means–end (goal-oriented) rationality is used to precisely calculate that which is necessary to attain a ...
Rationality: The rational assumption is one where players are able to accurately weigh the cost and benefits of all the information presented subsequently making their decisions based on their assessment. [80] Economic rationality in game theory is the assumption that the player ranks their assessments based on what would benefit them the most.
Practical rationality, on the other hand, aims at non-epistemic goals, like moral, prudential, political, economic, or aesthetic goals. This is usually understood in the sense that rationality follows these goals but does not set them. So rationality may be understood as a "minister without portfolio" since it serves goals external to itself. [1]
Netflix added millions of paying customers in the last year after telling password sharers to get their own subscription.