Smart Economic Decision-Making in a Complex World

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. The book examines the conditions under which smart people generate outcomes that improve their place of work, their household and society. Within this work, the curious reader will find interesting open questions on many fascinating areas of current economic debate, including, the role of realistic assumptions robust model building, understanding how and when non-neoclassical behavior is best practice, and why the assumption of smart decision-makers is best to understand and explain our economies and societies.

Additional sections cover when and how efficiency is achieved, why inefficiencies can persist, when and how consumer welfare is maximized, and what benchmarks should be used to determine efficiency and rationality.

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 capacitiesExplains how incorporation of the ‘smart’ decision-maker concept into economic thought improves our understanding of how, why and when people generate certain outcomesExplores how economic efficiency can be achieved, individual preferences realized, and social welfare maximized through the use of ‘smart and rational’ approaches

1. Introduction: Smart thinking in the real world of complexity
2. The evolution of decision-making: Why institutions and capabilities matters
3. How complexity affects decision-making
4. Freedom of choice in a complex world
5. Understanding rational inefficiency: A scientific basis for economic failure and success
6. How consumers can achieve freedom of choice: When consumers are truly sovereign
7. Inside the black box of the firm: Why choice, power and preferences matter for productivity and efficiency
8. How smart people can be involuntarily employment when misguided policy dominates decision-making
9. Why financial literacy matters for socio-economic wellbeing
10. How labour markets really work