The phrase "assumption of rational" is not correct as it lacks clarity and completeness in English.
It could be used in contexts discussing theories or frameworks that rely on rationality as a foundational principle, but it needs additional context to be meaningful.
Example: "The assumption of rational behavior is central to many economic models."
Alternatives: "presumption of rationality" or "belief in rationality".
In such a world, as you might expect, it is much more difficult to reach sharp conclusions, or offer black and white policy advice, than under the assumption of rational expectations.
It was Sargent and Wallace who purported to demonstrate that under the assumption of rational expectations changes in monetary policy on the part of the Fed that are anticipated by the public will have no impact at all.
For the purposes of understanding how society copes with the consequences of those decisions, the assumption of rational utility-maximisation works just fine.But today's neuroeconomists are not the first dismal scientists to dream of peering inside the human brain.
They had, Mr. Bernanke wrote, "argued for the inherent instability of the financial system but in doing so have had to depart from the assumption of rational economic behavior".
"In all of the game theory and everything else considered in the West, it was always based on the assumption of rational actors on both sides," K. Subrahmanyam, a writer and national-security strategist who is regarded as an intellectual father of India's nuclear-weapons doctrines, told me.
But few voters are content to have their economies run as charities (and a good thing for economists that they aren't, as that would make a baseline assumption of rational self-interest look pretty absurd).A generation of global integration has been very good for the world's developing economies.
Its mathematically based models and assumptions of rational conduct can appear, to non-economists, like toys, entertaining but, by definition, of limited utility.
Evidence supporting theoretical validity (consistency with assumptions of rational choice theory) was limited.
However, the patterns emerging from the studies on the decision-making mechanisms underlying female mating preferences show that choice may be context-dependent (Kirkpatrick et al. 2006; Reaney 2009; Royle et al. 2008; present one), deviating from the assumptions of rational choice theory (Luce 1959; Tversky and Simonson 1993).
Moreover, a robust H∞ controller is designed based on μ−DKiteration, with assumption of presence rational deviation in parameters and suitable weights to attenuate the control signals.
The largest contribution of this strain of modeling comes not from the assumption of boundedly rational agents, but rather the careful investigation of the effects of particular social structures on the equilibrium outcomes of various games.
