VALUE PERCEPTION BY HUMAN BRAIN AND THE Ψ-RATIONAL COMPONENT OF ECONOMIC DECISION MAKING
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F26482789%3A_____%2F19%3AN0000041" target="_blank" >RIV/26482789:_____/19:N0000041 - isvavai.cz</a>
Result on the web
<a href="https://www.aauni.edu/data/files/2019-ifrs-conference-proceedings-v5.pdf" target="_blank" >https://www.aauni.edu/data/files/2019-ifrs-conference-proceedings-v5.pdf</a>
DOI - Digital Object Identifier
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Alternative languages
Result language
angličtina
Original language name
VALUE PERCEPTION BY HUMAN BRAIN AND THE Ψ-RATIONAL COMPONENT OF ECONOMIC DECISION MAKING
Original language description
In this paper we set beyond the numbers, discussing how human brain interprets values in real life and how this conceptually relates to economic decision making. Our text builds on existing research, we synthesize and analyze results provided by other authors to induce and discuss outcomes. Although empirical trials in general falsify the assumption of normative rational decision making, we induce that core economic principles, such as the cost / benefit principle, inherency of opportunity cost and decision making at the margin do apply on the bio-cybernetic level. Human brain uses it's own intrinsic currency to interpret values and memorized data allow to relate the expected to the experienced. It is necessary to distinguish between the "rational" cognitive process and the "economically rational" outcome, as these are two fundamentally different concepts. We furthermore propose to distinguish between the "truly irrational" and what we call "Ψ-rational" within the set of all non-rational components of human decision making. The irrational components, such as missing, unreliable data or cognitive deficit to interpret and process such data always harm the decision making process and lead to economically inefficient outcomes. The Ψ-rational components, such as authentic and pretended altruism, unselfish cooperation, or perception and anticipation of fairness in distribution, contribute to economically efficient decisions within the human society, yet blatantly violating the normative conditions of rational decision making.
Czech name
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Czech description
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Classification
Type
D - Article in proceedings
CEP classification
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OECD FORD branch
50201 - Economic Theory
Result continuities
Project
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Continuities
N - Vyzkumna aktivita podporovana z neverejnych zdroju
Others
Publication year
2019
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Article name in the collection
Conference Proceedings 7th International Scientific ConferenceIFRS: GLOBAL RULES & LOCAL USE- BEYOND THE NUMBERS
ISBN
978-80-87956-96-0
ISSN
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e-ISSN
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Number of pages
16
Pages from-to
268-283
Publisher name
Metropolitan University Prague Press & Anglo-American University
Place of publication
Praha
Event location
Praha
Event date
Oct 10, 2019
Type of event by nationality
EUR - Evropská akce
UT code for WoS article
000649685400021