Abstract
Finding the true meaning of the assumption of rationality has attracted the attention of many scholars and brought forward major changes to the discipline of economics. However, the vast amount of literature shows that such attention has not only led to inconsistent interpretations, but also contradictory ones. To clear up these inconsistencies and contradictions, this paper looks at this assumption from a different angle – natural endowments of individuals and business firms, respectively. To do so successfully, this research goes far beyond all well-adopted methods of analysis and employs systems methods and such a logical reasoning that is parallel to that widely used in different branches of mathematics, such as plane geometry and topology. Because of the novelty of particularly chosen angle and adopted methodology, this paper develops the following main conclusion along with other 15 thought-provoking propositions: At either the micro individual level or the macro firm level, the assumed rationality stands for an optimal fit of the decided choice within the underlying natural endowments of the decision-maker.
Recommended Citation
Forrest, Jeffrey Yi-Lin; Shao, Lawrence; Liu, Jun; and SLOBODA, BRIAN
(2023)
"The Meaning of Optimum and Chosen Method of Optimization are Individually Defined,"
Pennsylvania Economic Review: Vol. 30:
No.
1, Article 3.
DOI: https://doi.org/10.65193/3067-8080.1026