Economic rationality - Deepstash





What is 'rationality'? - Economy

Economic rationality

Economic rationality

We usually think about rationality as being sensible or reasonable. For economists, rationality means when you make a choice, you will choose the thing you like best. Economic rationality accepts that people will act in a relatively predictable way.

Economists use this assumption to build economic models or theories. A famous theory is the law of supply and demand which states that if something costs more, rational people will probably want to buy less of it and sell more of it.



Heuristics: Mental Shortcuts
Heuristics: Mental Shortcuts

In our daily lives, we do not have the time, knowledge or skills to make the perfect decision/choice every time, and it may be too exhausting and time-consuming to make really big decisions in a pe...

Cognitive Bias: The Other End Of Heuristics

When our heuristics make us do unreasonable things and ignore obvious dangers, it is termed as a cognitive bias, a systematic error that is based out of our unawareness.

These systematic thinking patterns form the mental models that make us perform automated functions, and blind our views towards reality.

The Most Common Cognitive Biases
  • Representativeness Heuristic: assumes that if something reminds us of something we know already, it is part of the same group.
  • Availability Heuristic: The more something comes in front of us, the more likely we think it is.
  • Anchoring Heuristic: Unconsciously giving a disproportionate amount of importance to the first piece of information that is learned.
John F. Kennedy

"As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but ..."

John F. Kennedy
Stop being determined to fail

Stop making things not work for you. Stop looking for reasons why it doesn't work or why it will never work for you, instead figure out a way to make good things happen for you.

Whenever we try to make changes in our lifestyle, sometimes we doubt ourselves that maybe we can't do it or it isn't suitable for us. Why does it happen? It isn't because of fear but because we don't believe in ourselves. We aren't confident enough to keep pushing through to do the things we should.

Believe in yourself more

No idea will work for every single person, but a lot of them can work for most people as long as you believe that you can make them work. Stop wasting your energy to worry. Use the what you have to create and grow from what you've learned.

You need to put more trust in yourself and believe in the process of things. If one thing doesn't work for you then just experiment with new ideas and get through the day until you discover a way to make it work.

Mastery Also Involves Boredom
Mastery Also Involves Boredom

Mastery does not happen by chance. If you want to fulfil your potential, you must practice consistently at a specific skill over a long time. But the top performers in any craft also figure...

How to Fall in Love With Boredom

There is little hope of falling in love with a habit you really hate. If you dislike exercising, but you know it's good for you, you have two options to fall in love with the repetitiveness of the routine:

  • You can increase your proficiency at the task. Learn the basic fundamentals of your task and celebrate the small wins and improvements you make.
  • You can fall in love with a result of the task rather than the task itself.
The Power of Patience

Success is often found by practising the fundamentals that everyone knows they should be doing, but they find it too tedious or simple to practice regularly.

A blend of patience and consistency creates the ultimate advantage.