| Traditional economics sets"complete rationality"hypothesis as a premise that without any proof. The whole theory of traditional economics is based on such hypothesis. But it is so far from the real world that other economists argue against the hypothesis. Some of them take use of the theory of Experimental Economics and Psychology to object it and put forward their own hypothesis: bounded rationality. What's more, they put the hypothesis into use and acquire great success. Then Behavioral Economics is established.In their eyes, people's judgment and decision will be apart from complete rationality under uncertainty. So it's impossible for people to realize utility-maximization. This results from"bounded rationality". The success of Behavioral Economics is not only because of its theory but also because of its perfect explanation to the real world. The main content and structure of the paper is as follows:Introduction: Behavioral Economics puts forward"bounded rationality"hypothesis because the blemish of"complete rationality"hypothesis.Chapter 1: This section mainly describes the development skeleton of the argument against"complete rationality"hypothesis after introducing the development of it. Then it leads to the emergence of Behavioral Economics that is proposed to overstep the hypothesis.Chapter 2: This section analyzes the"bounded rationality"hypothesis of Behavioral Economics. The hypothesis causes revolutionary influence in western world. Also it meets animadversion from other economists due to its weakness.Chapter 3: This section briefly analyzes the application of"bounded rationality"hypothesis of Behavioral Economics. These fields include the microeconomics, macroeconomics, law and economics, etc. The successful application in these fields makes Behavioral Economics become a prominent school.Chapter 4: This section discusses what we can learn from"bounded rationality"hypothesis of Behavioral Economics. We can not only use the theory to explain economic problems in China, but also we should draw lessons from it to promote the development of Chinese economics.Conclusion: This section summarizes the above 4 sections and introduces the latest development of Behavioral Economics. Also, it analyzes the future orientation of Behavioral Economics. |
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