Hartmut Esser
When Prediction Fails
The Reactions of Rational Choice Theory and Behavioral Economics to the Unexpected Appearance of Framing-Effects
Abstract: This contribution deals with the various ways in which Rational Choice Theory (RCT) and behavioral economics have reacted to the numerous violations of the axiom of irrelevant alternatives by framing-effects. It starts with reporting the findings of some variations of the seminal Kahneman–Tversky-Experiments, which show that, even with strong changes in incentives, significant effects of the verbal “definition of the situation” remain. The reactions of RCT and behavioral economics to similar findings in game-theoretical experiments (also with “real” incentives) are summarized by three points: ...
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