Smart Economic Decision-Making in a Complex World - 1st Edition - ISBN: 9780128114612

Smart Economic Decision-Making in a Complex World

1st Edition

Authors: Morris Altman
Paperback ISBN: 9780128114612
Imprint: Academic Press
Published Date: 1st August 2018
Page Count: 320
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Smart Economic Decision-Making in a Complex World is a fresh and reality-based perspective on decision-making with significant implications for analysis, self-understanding, and policy. Although people can make mistakes and are not always quick to learn, in this book it is recognized that most decision makers are smart and rational but don’t behave in accordance with the norms of conventional economics. Perhaps surprisingly, this tends to generate outcomes that are superior to what would occur had people behaved in accordance to norms of conventional economics. ‘Smart’ decision-makers don’t have to be efficient or make decisions that are in the best interest of society or even in their own best interest. Much depends on the decision-making environment, the preferences of decision makers, and the power relationship amongst decision makers. Altman also examines the conditions under which smart people generate outcomes that improve their place of work, their household, and their society. Within this work, the curious reader will find interesting open questions - and progress towards their resolution - in many fascinating areas of current economic debate, including:

  • The role of realistic assumptions robust model building
  • Understanding how and when non-neoclassical behaviour is best practice
  • Why the assumption of smart decision-makers is best to best understand and explain our economies and societies
  • When and how efficiency is achieved
  • Why inefficiencies can persist
  • When and how consumer welfare is maximized
  • What benchmarks should be used to determine efficiency and rationality

Key Features

  • Makes the case for ‘smart and rational’ decision-making as a context-dependent rational process that is framed by socio-cultural environment and conditioned by institutional capacities
  • Explains how incorporation of the ‘smart’ decision-maker concept into economic thought improves our understanding of how, why and when people generate certain outcomes
  • Explores how economic efficiency can be achieved, individual preferences realized, and social welfare maximized through the use of ‘smart and rational’ approaches


Under(graduate) students in economics and beyond who are interested in decision-making, the process of decision-making, decision making environments, and how real people act in the real world should be interested in this book

Table of Contents

1. Introduction: Rationality Within the Bounds of Reason
2. Benchmarks for Better Decisions
3. Mental Models and Decision-Making
4. Heuristics Versus Deep Calculation
5. Rational Inefficiency: Smart Decisions and Bad Social Outcomes
6. Financial Illiteracy With Smart People
7. Smart Thinking and Errors and Biases
8. Consumption Gone Awry
9. Rational Firms and Suboptimal Performance
10. Smart Thinking, Market Failure, and Macroeconomics
11. Nudging Versus Institutional Design, Capabilities and Freedom
12. Conclusion


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© Academic Press 2018
Academic Press
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About the Author

Morris Altman

Morris Altman is Dean of the Newcastle Business School, Australia, and is Professor of Behavioral and Institutional Economics. He is also Professor Emeritus at the University of Saskatchewan, Canada. He earned his PhD in economics from McGill University in 1984. A former visiting scholar at Cambridge, Cornell, Duke, Hebrew, Stirling, and Stanford University, he served as Editor of the Journal of Socio-Economics for 10 years and is currently the Associate Editor of the Review of Behavioral Economics. Morris has published over 100 refereed papers and given over 150 international academic presentations on behavioral economics, x-inefficiency theory, institutional change, economics of cooperatives, economic history, methodology, and empirical macroeconomics and has published six books in economic theory and public policy including, Handbook of Contemporary Behavioral Economics, Behavioral Economics for Dummies, Economic Growth and the High Wage Economy, and Real-World Decision Making: An Encyclopedia of Behavioral Economics.

Affiliations and Expertise

Dean, Newcastle Business School, Australia and Professor, Behavioral and Institutional Economics

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