Smart Economic Decision-Making in a Complex World is a fresh and reality-based perspective on decision-making with significant implications for analysis, self-understanding and policy. The book examines the conditions under which smart people generate outcomes that improve their place of work, their household and society. Within this work, the curious reader will find interesting open questions on many fascinating areas of current economic debate, including, the role of realistic assumptions robust model building, understanding how and when non-neoclassical behavior is best practice, why the assumption of smart decision-makers is best to understand and explain our economies and societies, and under what conditions individuals can make the best possible choices for themselves and society at large.
Additional sections cover when and how efficiency is achieved, why inefficiencies can persist, when and how consumer welfare is maximized, and what benchmarks should be used to determine efficiency and rationality.
- Makes the case for 'smart and rational' decision-making as a context-dependent rational process that is framed by socio-cultural environment and conditioned by institutional capacities
- Explains how incorporation of the 'smart' decision-maker concept into economic thought improves our understanding of how, why and when people generate certain outcomes
- Explores how economic efficiency can be achieved, individual preferences realized, and social welfare maximized through the use of 'smart and rational' approaches
1. Introduction: Rationality Within the Bounds of Reason 2. Benchmarks for Better Decisions 3. Mental Models and Decision-Making 4. Heuristics Versus Deep Calculation 5. Rational Inefficiency: Smart Decisions and Bad Social Outcomes 6. Financial Illiteracy with Smart People 7. Smart Thinking and Errors and Biases 8. Consumption Gone Awry 9. Rational Firms and Suboptimal Performance 10. Smart Thinking, Market Failure, and Macroeconomics 11. Nudging Versus Institutional Design, Capabilities and Freedom 12. Conclusion
Morris Altman is the Dean of the University of Dundee Business School, Dundee, UK, and a chair professor of behavioural and institutional economics, and cooperatives. He is also an emeritus professor at the University of Saskatchewan, Canada. He earned his PhD in economics from McGill University in 1984. A former visiting scholar at Cambridge University, Cornell University, Duke University, Hebrew University, Stirling University, and Stanford University, he served as an editor of the Journal of Socio-Economics for 10 years and is co-founder of Review of Behavioral Economics and is the founding editor of the Elsevier book series, Perspectives on Behavioral Economics and the Economics of Behavior. Dr. Altman has published over 100 refereed papers and ten books in economic theory and public policy including, Handbook of Contemporary Behavioral Economics, Behavioral Economics for Dummies, Economic Growth and the High Wage Economy, Real-World Decision Making: An Encyclopedia of Behavioral Economics, and Handbook of Behavioural Economics and Smart Decision-Making: Rational Decision-Making within the Bounds of Reason. Dr. Altman has also given over 150 international academic presentations on behavioral economics, x-inefficiency theory, institutional change, economics of co-operatives, economic history, methodology, ethics, and empirical macroeconomics.