2007-01-02 06:11:21 · 3 answers · asked by tinkerbell 1 in Social Science ➔ Economics
Traditional theories of finance and economics are based on humans being rational -- making choices that are based on non-changing and internally-consistent preferences.
Unfortunately or fortunately, humans do not appear to be totally rational. New theories are trying to understand the degree to which humans are not rational, and to understand the nature of their irrationality.
2007-01-02 06:23:14 · answer #1 · answered by Allan 6 · 0⤊ 0⤋
The bubble in the stock market in the late 90's undermined theories that relied on rational investors. In attempting to explain the bubble attention is now being focused on irrational behavior.
2007-01-02 22:24:11 · answer #2 · answered by meg 7 · 0⤊ 0⤋
This question cannot be answered without the required focus.
2007-01-02 14:16:19 · answer #3 · answered by Anonymous · 0⤊ 0⤋