Authors
Citation
Wb. Macleod, DECISION, CONTRACT, AND EMOTION - SOME ECONOMICS FOR A COMPLEX AND CONFUSING WORLD, Canadian journal of economics, 29(4), 1996, pp. 788-810
Citations number
63
Categorie Soggetti
Economics
Journal title
ISSN journal
00084085
Volume
29
Issue
4
Year of publication
1996
Pages
788 - 810
Database
ISI
SICI code
0008-4085(1996)29:4<788:DCAE-S>2.0.ZU;2-#
Abstract
This essay illustrates that if Savage's small world assumption is rela
xed, one can construct a theory of bounded rationality that incorporat
es some of the insights from recent work in cognitive psychology. The
theory can be used to explain why contracts are incomplete and the exi
stence of endowment effects in exchange.