Personal Reflective Writing Assignment Rationality - 825 Words

Personal Reflective Writing Assignment: Rationality (Other (Not Listed) Sample) Content: Personal Reflective writing: RationalityAuthors Name Institutional Affiliation Rationality In this reflective paper, I focus on rationality in economics. The first time I saw the title of this lecture, I was intrigued and did not put much thought to it. I decided to attend the lecture in order to explore more about rationality. I came to understand that in everyday occurrence, we come across situations that need one to make a decision. A rational decision-making call for advancing a decision that will lead to the optimum benefit or utility for an individual (Blaug, 1992). The conventional economists created an illusion that all persons participating in an activity always behave in a rational manner. Rationality does not always entail receiving the most material or fiscal benefit since something satisfaction can be emotional. Learning rationality in the lecture has provided significant knowledge in economic decision-making as well as making a decision that goes beyond business and money. I learnt that for a decision to be rational, it needs to be based on logical sense and this decision needs to be made without a significant involvement of emotions. According to our lecture, rational behaviours do not necessarily call for acquiring the highest return since it also calls for a person to consider the risks involved. The aversion of risk can be considered to be very rational on several occasions relying on the exact objective or situation faced (Blaug, 1992). Throughout the lecture, it became clear that to me that any behaviour of consumers responding to price as well as wealth cannot be explained by the maximisation or optimization of some utility. Instead, some consumers will try to maximise unobservable subjective utility (Reiss, 2013). I learned that this utility is known as ordinal since all that matters is the ordering between benefits of various consumption packages. This could be more accurate and less perplexing if people learned to speak of the ordinal equivalence class of the utility function. It involves regarding two utility function to be equivalent when they both symbolise similar preference ordering, including a similar reflexive, transitive and complete twofold relation. Consequently, what could matter is the preference ordering involving the choice of utility function from an ordinal equivalence class symbolising the preference ordering to be inapplicable (Reiss, 2013). But since the preference ordering exists, I have come to acknowledge that it does not matter even if it is not represented by a utility function. Such assertions underlie the revolution in the demand framework that accomplished when Hicks and Allen (1934) dismissed the notion of measured utility. The advancement of Samuelson (1938) known as a revealed preference was vital in inferring the preferences from the demand behaviour. Nonetheless, I came to learn that it stressed how demand theory begins with demand function than starting with utilit y functions and goes on to question when the demand functions are consistent with the maximisation of preference ordering. I came to understand that economic decisions are made subject to several constraints like limited income and resources and rely on one`s intellectual and physical capabilities. A significant constraint that I learned about is time. That is, each day one will face a challenge of allocating 24 hours to fit the various competing activities including studying, entertainment, socialising, sleeping and others. Another vital factor in rationality includes information. While evaluating various options, people will utilise the available knowledge, but sometimes it calls for the collection of additional information that allows to have an objective view concerning the matter at hand (Von Neumann Morgenstern, 2007). The neoclassical approaches tend to believe that rational behaviours entail optimizing benefits founded on the ...