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The discourse of bounded rationality in academic and policy arenas: pathologising the errant consumer

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  • Judith Mehta

Abstract

This article draws on perspectives in philosophy and the sociology of knowledge to critically review the discourse of bounded rationality within contemporary economics. It is argued that the discourse pathologises consumers who are susceptible to sub-optimal market outcomes, treating their behaviour as abnormal and treating individuals as deviants in need of rehabilitation. It is claimed that by this means new forms of policy are legitimated, specifically behavioural remedies designed to draw apparently errant consumers towards behaviour that conforms more closely to the standard (that is, neoclassical) model of decision making. It is argued that the upsurge of interest in these behavioural remedies distracts attention from facets of the individual's environment, such as the characteristics of markets and the behaviour of firms, and also the set of norms and beliefs underpinning the economic system. Copyright , Oxford University Press.

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  • Judith Mehta, 2013. "The discourse of bounded rationality in academic and policy arenas: pathologising the errant consumer," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(6), pages 1243-1261.
    • Handle: RePEc:oup:cambje:v:37:y:2013:i:6:p:1243-1261
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    File URL: http://hdl.handle.net/10.1093/cje/bet040
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    Citations

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    Cited by:

    1. Brendan Markey-Towler, 2018. "Salience, chains and anchoring. Reducing complexity and enhancing the practicality of behavioural economics," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 2(1), pages 83-90, March.
    2. Paolo Crosetto & Alexia Gaudeul, 2014. "Choosing whether to compete: Price and format competition with consumer confusion," Jena Economics Research Papers 2014-026, Friedrich-Schiller-University Jena.
    3. Guilhem Lecouteux, 2023. "The Homer economicus narrative: from cognitive psychology to individual public policies," Journal of Economic Methodology, Taylor & Francis Journals, vol. 30(2), pages 176-187, April.
    4. Lauren Larrouy & Guilhem Lecouteux, 2018. "Choosing in a Large World: The Role of Focal Points as a Mindshaping Device," Working Papers halshs-01923244, HAL.
    5. Brendan Markey‐Towler, 2019. "The New Microeconomics: A Psychological, Institutional, and Evolutionary Paradigm with Neoclassical Economics as a Special Case," American Journal of Economics and Sociology, Wiley Blackwell, vol. 78(1), pages 95-135, January.
    6. Steffestun, Theresa, 2020. "The Constitution of Ignorance: Zur Bedeutung von Nichtwissen in der Verhaltensökonomie," Working Paper Serie des Instituts für Ökonomie 67, Hochschule für Gesellschaftsgestaltung (HfGG), Institut für Ökonomie.
    7. Chris Berg & Sinclair Davidson, 2017. "Nudging, calculation, and utopia," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 1(S), pages 49-52, November.
    8. John Moss & Karen Rowlingson & Andrew Lymer, 2024. "Exploring the barriers to accessing personal financial planning advice," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(1), pages 17-32, March.
    9. Guilhem Lecouteux, 2022. "The Homer economicus narrative: from cognitive psychology to individual public policies," Working Papers hal-03791951, HAL.

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