This chapter is a very compressed review of the neoclassical orthodoxy on the nature of rationality on economic theory. It defends the orthodoxy both against the behavioral criticism that it assumes too much and the revisionist view that it assumes too little. In places, especially on the...

This chapter focuses on the focal points and bargaining. The idea of a focal point is of great practical importance. However, no consensus exists concerning the manner in which focal points become established or survive after their establishment. At one extreme, some authors emphasize...