Wednesday, November 25, 2009

It's in the ABC's of growing up..

In Economic theory there is a common assumption that all individuals involved in the economic transaction behave rationally. But what exactly is rational? How do we decide who is rational? What is a rational action? And if you don't know what rational is, can you say YOU are rational? If you don't even know if you are rational, really, who are you to judge?
In philosophy, rationality and reason are the key methods used to analyze the data gathered through systematically gathered observations. In economics, sociology, andpolitical science, a decision or situation is often called rational if it is in some sense optimal, and individuals or organizations are often called rational if they tend to act somehow optimally in pursuit of their goals.
~Wikipedia

How very vague... =|

2 comments:

Zhongy said...

It means that to be rational is to be making the best (or optimal) decisions for yourself. In economic sense, it means maximising your own pay-offs with respect to the restrictions and rules of hte transaction.

~butterfly~ said...

haha zhongggg! don't potong my steam la! i was just ranting on coz someone who's supposedly 'rational' and 'responsible' and 'not as immature as i am' was being particularly dumb that day :p