The defect of complete rationality

Since the economic recession and crisis occurred in western developed countries from 65438 to 0930, the assumption of complete rationality has been condemned and questioned by all parties. Until today, everything it covers has been falsified, which also implies that mainstream economics can't accept economic problems because its theoretical basis is flawed. Amos Welski described in detail the invariance of choice, the invariance of procedure and the independence of context. First of all, he found that, contrary to the result of description invariance, actors make choices according to the description of choices, not based on their own choice sets. For example, subjects were tested to choose economic plans with different inflation rates and unemployment rate expectations in two situations. In the first group, the subjects were told that if Plan A was adopted, 10% of the workforce would be unemployed and the inflation rate would be 12%. If Plan B is chosen, 5% of the workforce will be unemployed and the inflation rate will be 17%. Therefore, most subjects in this group chose Plan B, which promised to reduce unemployment. At the same time, the subjects in the second group were told that if Plan A was adopted, 90% of the workforce would be employed and the inflation rate would be 12%. If Option B is selected, 95% of the workforce will be employed and the inflation rate will be 17%. Contrary to the choice in the first set of scenario models, most subjects in this group chose Plan A, which promised a lower inflation rate. The equivalent explanation of the same choice problem requires avoiding systematic errors of preferences. When the same information structure is 5% and 10% unemployment rate difference, it will bring greater impact than 95% and 90% employment rate.

Secondly, complete rationality also means that different ways of equivalence theory reveal the same preference order. That is, program invariance. For example, the priority between X and Y can be determined by providing a direct choice alone or by comparing the prices between them. These two analysis methods should produce the same priority or priority order. However, in fact, there are cases of selection inversion. Actors systematically violate procedural invariance. Welski proved that actors often set the preference order according to the importance they attach to the selected attributes and the harmony of the situation, which was also proved by Kahneman's usability principle.

Finally, context independence also means that the actor has a complete preference sequence and can give a set of values, and the actor can choose the option with the largest value in the sequence, that is, a non-preference item cannot be the first choice by adding new options to the option set. However, Welski proved that the preference of actors is influenced by the set of options, and the popularity of an option can be improved by expanding the set. For example, the role of "comparison effect" leads to the non-independence of choice and judgment. Participants do not optimize the pre-calculated selection sequence, but build their choices according to the available options. As a result, changes in the provided set produce decisions that do not conform to simple optimization.

(4) Actors are heterogeneous and have different preferences. Actors are not homogeneous, but heterogeneous. This is the most difficult part of this hypothesis. As we all know, no two people are exactly the same in reality. Because of different age, gender, wealth, knowledge structure and experience, different information sets and other factors, actors' risk attitudes and preference utility are different, which leads to different decision-making results even if different decision-makers face the same event.

(5) It is impossible to quantify the results of all choices, such as utility or marginal utility, cost or marginal cost, income or marginal income in economics, and of course it is impossible to allocate every utility value and compare the advantages and disadvantages of action plans, so it is impossible to make an ideal choice. This is also a common phenomenon in human life. Simon listed his investigation case of public entertainment facilities management in Milwaukee 1934, which was jointly handled by the Municipal Education Commission and the municipal public facilities department. The two institutions always disagree on the allocation of funds for the maintenance of recreational facilities and the supervision of recreation. They don't follow the principle of marginal equality in textbooks at all, so that the marginal cost of one activity is equal to that of another. The reason is that their intelligence and knowledge are not enough to enable them to do this. In fact, there is no measurable production function from which they can draw quantitative inferences about marginal productivity.

(6) Summing up the criticism of complete rationality, the actor has no complete predictive ability and cannot infer the probability distribution of uncertainty; Without complete calculation and reasoning ability, it is impossible to find all the selection sets, and even if it is found, it is impossible to put all the schemes into practice in a short time; There are no fully measurable economic indicators, such as utility, cost and income, so it is impossible to prioritize the options; Even if some measurable indicators can exist, actors will violate the invariance of program preferences. Therefore, since all kinds of premises and assumptions are not established, it is impossible to achieve the goal of maximizing utility.