The School of Economics and the College of Computing will host Prof. Robert Aumann, winner of the 2005 Nobel Memorial Prize in Economics. Prof. Aumann will be presenting "Rule-Rationality: A Synthesis of Behavioral and Mainstream Economics".
Mainstream economic theory is based on the rationality assumption: that people act as best they can to promote their interests. Contrariwise, behavioral economics holds that people act by behavioral rules of thumb, often with poor results. We propose a synthesis according to which people indeed act by rules, which usually work well; but in exceptional or contrived scenarios, may work poorly. The reason is that like physical features, behavioral rules have evolved; and evolution works on the usual, the common---not the exception, not the contrived scenario. The upshot is that on the whole, people act rationally. The often-heard assertion that "people do not act as economists think" is simply unfounded.
Aumann is the author of over ninety scientific papers and six books, and has held visiting positions at Princeton, Yale, Berkeley, Louvain, Stanford, Stony Brook, and NYU. He is a member of the American Academy of Arts and Sciences, the National Academy of Sciences (USA), the British Academy, and the Israel Academy of Sciences; holds honorary doctorates from the Universities of Chicago, Bonn, Louvain, City University of New York, Bar Ilan University, and Ben Gurion University of the Negev; and has received numerous prizes, including the Nobel Memorial Prize in Economic Sciences for 2005.