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Keen Behavioural Finance 2011 Lecture01 Economic Behaviour Part 2

Summary:
In this second half of the first lecture, I explain Sippel’s result that most people aren’t “rational” as Neoclassical economists define it–because the Neoclassical definition of rational behavior is computationally impossible. The next lecture–which I’ll post next week–explains that even if the Neoclassical model of individual behavior was sound (which I’ve just shown it isn’t), ...

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In this second half of the first lecture, I explain Sippel’s result that most people aren’t “rational” as Neoclassical economists define it–because the Neoclassical definition of rational behavior is computationally impossible.



The next lecture–which I’ll post next week–explains that even if the Neoclassical model of individual behavior was sound (which I’ve just shown it isn’t), the market demand curve derived by aggregating the demand functions of “rational utility maximizing individuals” could have any shape at all. The “Law of Demand”,a cornerstone of Neoclassical thought, is false.



Steve Keen
Steve Keen (born 28 March 1953) is an Australian-born, British-based economist and author. He considers himself a post-Keynesian, criticising neoclassical economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen's thinking about economics include John Maynard Keynes, Karl Marx, Hyman Minsky, Piero Sraffa, Augusto Graziani, Joseph Alois Schumpeter, Thorstein Veblen, and François Quesnay.

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