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Keen Behavioural Finance 2011 Lecture01 Economic Behaviour Part 2

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Uploaded on Aug 3, 2011

In this second half of the first lecture, I explain Sippel's result that most people aren't "rational" as Neoclassical economists define it--because the Neoclassical definition of rational behavior is computationally impossible.

The next lecture--which I'll post next week--explains that even if the Neoclassical model of individual behavior was sound (which I've just shown it isn't), the market demand curve derived by aggregating the demand functions of "rational utility maximizing individuals" could have any shape at all. The "Law of Demand",a cornerstone of Neoclassical thought, is false.

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