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A sideways look at economics

Is it rational to use the Tube?

15 November 2019|

We’ve all done it. Endured the chaotic cesspool that is the Tube, inevitably encountering that person who refuses to move down the aisle when the train is busy, leaves their backpack on, and blocks the doors when you finally decide you can’t take listening to their awful taste in music anymore. So, are we thinking rationally when we opt to use the Tube? Rationality is one of the key assumptions underlying neoclassical economic theory. The theory contends that economic agents have objectives, which they attempt to maximise. In the case of individuals, they try to maximise their satisfaction (or utility), whilst producers vie to maximise profits. Arguably, Herbert Simon’s idea of bounded rationality is a more reasonable assumption. This notion highlights the fact that economic agents don’t always act rationally, meaning that they often end up making satisfying decisions, rather than optimal ones. For example, individuals suffer from choice overload; they don’t make optimal decisions

Thank Fathom it's Friday

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