Decision, Contract, and Emotion: Some Economics for a Complex and Confusing World.

This essay illustrates that is if Leonard J. Savage's (1972) small world assumption is relaxed, one can construct a theory of bounded rationality that incorporates some of the insights from recent work in cognitive psychology. The theory can be used to explain why contracts are incomplete and the existence of endowment effects in exchange.

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Year of publication:	1996
Authors:	MacLeod, W. Bentley
Published in:	Canadian Journal of Economics. - Canadian Economics Association - CEA. - Vol. 29.1996, 4, p. 788-810
Publisher:	Canadian Economics Association - CEA

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Extent:	text/html
Type of publication:	Article
Notes:	Published
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005271685