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Economic and Emotional Rationality: An Application to Wealth Concentration
Universidad de Concepcion, Concepcion, Chile
- 1 Universidad de Concepcion, Concepcion, Chile
- 2
Theoretical Economics Letters·Volume 03 (2013)·Pages 233–244·Published 17 July 2013·DOI10.4236/tel.2013.34040
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Abstract
This Paper presents a theoretical outline regarding the Emotional Well-being (EW) function as an extension of the economic utility function. EW includes habitual factors that are always present in everyday decision making. Firstly, an analytical-mathematical conceptualization of EW is carried out, followed by a study of the concept of emotional security, in order to define a new idea of emotional rationality as a complement to economic rationality. An explanation is put forth, as an application, of the concentration of wealth phenomenon according to the focus on economic and emotional rationality. The conclusion is that EW is a theoretical approach which can clarify the understanding of the decision making process in economics activities.
KeywordsUtility FunctionEmotional Well-BeingEconomic RationalityEmotional RationalityConcentration of Wealth
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