Rationality
In game theory, one of the most common assumptions made is that every player/participant is rational. In its mildest form, rationality implies that every player is motivated by maximizing his own payoff.
Rationality
In philosophy, the word rationality has been used to describe numerous religious and philosophical theories, especially those concerned with truth, reason, and knowledge.
Bounded rationality places a check on economic theory which assumes firms and consumers are rational.
The advent of technology like the internet and computers have helped give consumers more informed choice.
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rationality, market : although individual market participants may vary in their degree of rational choice and rational action, the aggregate outcomes for the market as a whole are considered rational to the extent that the market is efficient.
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Rationality assumption The assumption that people do not intentionally make decisions that would leave them worse off.
Bounded rationality
A theory of human decision making that assumes that people behave rationally, but only within the limits of the information available to them.
bounded rationality: Models of bounded rationality are defined in a recent book by Ariel Rubinstein as those in which some aspect of the process of choice is explicitly modeled.
"The irrationality of a thing is no argument against its existence, rather a condition of it."
-- Friedrich Wilhelm Nietzsche
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Departures from rationality emerge both in judgments (beliefs) and in choices. The ways in which judgment diverges from rationality are extensive (see Kahneman et al. 1982).
& Espeland, Wendy Nelson, Accounting for Rationality: Double-Entry Bookkeeping and the Rhetoric of Economic Rationality, American Journal of Sociology, Vol. 97, No. 1, July 1991, pp. 40-41,44 46, ...
Two others main objections to the RE hypothesis (REH) come from the bounded rationality literature. First, it may be a very strong assumption that agents know the true stochastic process of the variables they need to forecast.
- quality, integrity and rationality of the management.
The industry attractiveness and intensity of competition can be judged by looking at the five forces of competition identified by Michael Porter of Harvard University.
Behavioral finance recognizes several deviations from rationality such as the use of heuristics, or rules of thumb; that framing or the way a problem is stated, can affect the decision made; and that biases exist.
markets, no interest rate differentials, no agency costs (rationality), and no transaction costs. These assumptions are, in fact, the main drivers of capital structure and gave rise to the trade-off theory of leverage.
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An approach to economics that relates supply and demand to an individual's rationality and his or her ability to maximize utility or profit.
Individual Rationality
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 See also: Assumptions, Expense, Optimal, Banks, Efficient market
  
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