A rational irrationality: Reviewing the Concept of Rationality in Conventional Economics and Islamic Economics

Authors

  • Muhammad Hasyim Ibnu Abbas Universitas Negeri Malang

DOI:

https://doi.org/10.24235/amwal.v1i1.6202

Abstract

In analyzing economic phenomena that occur in the midst of society, economists always use assumptions. Rationality is the most important assumption and becomes the main step in analyzing the phenomenon. Individuals in making decisions are assumed to be rational. Problems arise when rational human measurements for the economy of the classical generation are selfish and tend to be selfish. This article discusses how the assumption of rationality is debated among the three major streams of economics today. The three streams referred to are Classical-Neoclassical Economist, Behavioral Economist, and Islamic Economist. Neoclassical-Economist with the assumption that rational individuals are individuals who are concerned with personal desires, Economists of Behavior with the theory of Bounded-Rationality, and Islamic Economists with the argument that the main goal of humans is God.

References

Agil, S. O. S. (1989). Rationality in Economic Theory: A Critical Appraisal. In IIUM Journal of Economics and Management (Vol. 2, Issue 2, pp. 79–94).

Ashraf, M. A. (2018). Use of bounded rationality theory to understand participation of women in Islamic microfinance. Enterprise Development and Microfinance, 29(3–4), 186–208. https://doi.org/10.3362/1755-1986.18-00005

Aydin, N. (2013). Redefining Islamic Economics as a New Economic Paradigm. Islamic Economic Studies, 21(1), 1–34. https://doi.org/10.12816/0000238

Aysan, A. F., Disli, M., Duygun, M., & Ozturk, H. (2018). Religiosity versus rationality: Depositor behavior in Islamic and conventional banks. Journal of Comparative Economics, 46(1), 1–19. https://doi.org/10.1016/j.jce.2017.03.001

Burns, T., & Roszkowska, E. (2016). Rational Choice Theory: Toward a Psychological, Social, and Material Contextualization of Human Choice Behavior. Theoretical Economics Letters, 06(02), 195–207. https://doi.org/10.4236/tel.2016.62022

Harstad, R. M., & Selten, R. (2014). Bounded-rationality models: Tasks to become intellectually competitive. Voprosy Ekonomiki, 2014(5), 4–26. https://doi.org/10.1257/jel.51.2.496

Hedström, P., & Ylikoski, P. (2014). Analytical sociology and rational choice theory. Analytical Sociology: Norms, Actions and Networks, 57–50.

Isfandiar, A. A. (2015). Melacak Teori Rasionalitas Ekonomi berbasis Islamic Ethics. Muqtasid: Jurnal Ekonomi Dan Perbankan Syariah, 6(2), 23. https://doi.org/10.18326/muqtasid.v6i2.23-41

Jolls, C., Sunstein, C. R., & Thaler, R. (1998). A Behavioral Approach to Law and Economics. Stanford Law Review, 50(5), 1471. https://doi.org/10.2307/1229304

Kuran, T. (1996). The Discontents of Islamic Economic Morality. American Economic Review, 86(2), 438–442. https://doi.org/10.2307/2118166

Mahomedy, A. C. (2013). Islamic economics: Still in search of an identity. International Journal of Social Economics, 40(6), 556–578. https://doi.org/10.1108/03068291311321857

Rabin, M. (2013). Incorporating Limited Rationality into Economics. Journal of Economic Literature, 51(2), 528–543. https://doi.org/http://dx.doi.org/10.1257/jel.51.2.528

Rudnyckyj, D. (2011). Homo economicus and homo islamicus, revisited: Islamic finance and the limits of economic reason. 8th International Conference on Islamic Economics and Finance, 1–14. http://conference.qfis.edu.qa/app/media/254

Simon, H. A. (1955). A behavioral model of rational choice. The Quarterly Journal of Economics, 69(1), 99–188.

Stanovich, K. E. (2013). Why humans are (sometimes) less rational than other animals: Cognitive complexity and the axioms of rational choice. Thinking and Reasoning, 19(1), 1–26. https://doi.org/10.1080/13546783.2012.713178

Tan, C. (2013). Rationality and autonomy from the Enlightenment and Islamic perspectives. Journal of Beliefs & Values : Studies in Religion & Education Post-Secularism , Religious Knowledge and Religious Education, 35(3), 327–339.

Zaroni, A. N. (2012). Landasan Filosofis Perilaku Konsumen Dalam Perspektif Ekonomi Islam Dan Konvensional. Mazahib, 10(1), 55–68.

Downloads

Published

2020-04-24

Issue

Vol. 12 No. 1 (2020)

Section

Articles

License

The copyright of the published article shall be assigned to the journal as the publisher of the journal. The intended copyright includes the right to publish the article in various forms {including reprints}. The journal maintains the publishing rights to the published articles.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.