Abstract

Behavioral economists have leveled numerous objections to the narrow focus of neoclassical economics. Among these objections are (1) that conventional economic theory is not always consistent with the accumulated body of knowledge in disciplines such as psychology, sociology, anthropology, and organization theory, (2) that its assumptions are simplistic and unrealistic, in that it deduces its principles from features of human nature assumed to be constant and valid regardless of differences in time and space, rather than explaining economic phenomena on the basis of actual observed behavior, and (3) that it accepts the simplistic economic model of rational agents exhibiting optimizing behavior rather than more realistic behaviors such as the ones assumed by Simon’s bounded rationality model (Hosseini 2003, 394).