Rationality is the way to choose the optimal solution

Rationality is a rather complex concept from the standpoint of scientific analysis. However, considering it from the point of view of simple consciousness, one might think that it is very easy.

Definition

Rationality is a certain algorithm of actions, in the process of execution of which the subject will not choose one alternative, if it is available at the same time to another, which is recognized as the preferred one. In accordance with Hayek's theory, rational behavior should be aimed at obtaining a concrete result. It should be noted that rationality is the normal behavior of people, which can be investigated in terms of determining the norm of reality in the economy.

Basic forms of rational behavior

Thus, in economics , such basic types of rational behavior are distinguished: adherence to certain personal interests and immediate rationality.

Let us consider these forms in more detail. So, economic rationality is considered in the form of three basic forms:

• Maximization, which involves choosing the best option from all existing alternatives. This principle is based on the neoclassical theory, in which the business entity is represented by certain functions, and consumers - by the allocation of resources between certain economic spheres. At the same time, optimization should be traced at all stages of rationality reproduction.
• Limited rationality is a prerequisite accepted in economic theory in the form of transaction costs. This form implies the desire of economic actors to act rationally, but in practice has this ability to a limited extent.
• Organic rationality has found its application in the theories of Nelson, Winter and Alchian in tracking the evolutionary process within one and several enterprises.

The last two forms of rationality harmoniously complement each other. However, they are used to achieve different purposes. The study of their institutions is necessary to implement the method of reducing transaction costs by the followers of the neoclassical theory, but representatives of the Austrian school are widely used in ascertaining the viability of their institutions.

Rationality in the economic sphere

Rationality in the economy through the actions of man is regulated not only by concrete calculation. Some events and actions can occur under the influence of personal values, feelings and other manifestations of the psyche. From the outside observer, these or other human actions can be perceived and evaluated, as irrational and illogical.

The founders of economic theory noted that in the economic life of mankind there are factors that often lead to irrational actions. For example, A. Smith justified the law of the exchange of labor results between certain producers, as well as between the consumer and the producer, the buyer and the seller. In theory, known as the "labor cost theory", he proposed the equivalent price - the time required to produce goods. At the same time, scientists recognized the fact that simultaneously with the objectively expended time there is another, subjective value of the goods for the buyer and the producer.