ABSTRACT
This chapter focuses on rationality, one of the three structuring assumptions in economic theory. Rationality in economic theory is only, therefore, one way of thinking about reason and understanding. The chapter discusses the narrowness of rational choice theory (RCT), which stems in large part from it being closely aligned with individualism. It is often argued that because the version of RCT proposes a minimal notion of psychology there is some bare notion of the individual and its relation to the world. It has been also argued that the immense success of RCT in economics departments in the latter half of the last century was partly a legacy of its association with individualism during the Cold War period. The limitations of the standard approach, taken up by behavioural economics and neuroeconomics, suggest that in contrast to RCT's predictions actual behaviour is anomalous.
