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Concept
Rational agent
Summary
A rational agent or rational being is a person or entity that always aims to perform optimal actions based on given premises and information. A rational agent can be anything that makes decisions, typically a person, firm, machine, or software.
The concept of rational agents can be found in various disciplines such as artificial intelligence, cognitive science, decision theory, economics, ethics, game theory, and the study of practical reason.
In reference to economics, rational agent refers to hypothetical consumers and how they make decisions in a free market. This concept is one of the assumptions made in neoclassical economic theory. The concept of economic rationality arises from a tradition of marginal analysis used in neoclassical economics. The idea of a rational agent is important to the philosophy of utilitarianism, as detailed by philosopher Jeremy Bentham's theory of the felicific calculus, also known as the hedonistic calculus.
The action a rational agent takes depends on:
the preferences of the agent
the agent's information of its environment, which may come from past experiences
the actions, duties and obligations available to the agent
the estimated or actual benefits and the chances of success of the actions.
In game theory and classical economics, it is often assumed that the actors, people, and firms are rational. However, the extent to which people and firms behave rationally is subject to debate. Economists often assume the models of rational choice theory and bounded rationality to formalize and predict the behavior of individuals and firms. Rational agents sometimes behave in manners that are counter-intuitive to many people, as in the traveler's dilemma.
Many economic theories reject utilitarianism and rational agency, especially those that might be considered heterodox.
For example, Thorstein Veblen, known as the father of institutional economics, rejects the notion of hedonistic calculus and pure rationality saying: "The hedonistic conception of man is that of a lightning calculator of pleasures and pains who oscillates like a homogeneous globule of desire of happiness under the impulse of stimuli that shift him about the area, but leave him intact.
Official source
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