Irrationality: What, Why and How Defended on Thursday, 18 December 2014

This thesis has made a special effort to explore some relevant issues on (ir)rationality. Chapter 2 and Chapter 3 answer the question what is irrationality. Chapter 2 improves the methodology to measure irrationality by proposing a new incentive system on individual decision-making: the prior incentive system (Prince). Chapter 3 addresses the issue of irrationality in decisions under ambiguity. Chapter 4 answers the question of why we steer people away from irrationality. Chapter 4 discusses whether we should correct people's irrationality by imposing a better decision when freedom of choice cannot be realized. Chapter 4 concludes with recommending strong paternalism and provides a litmus test for people's views on paternalism. Chapter 5 answers the question how to make people less irrational. Chapter 5 studies the social influences on people's decision-making processes and offers possible approaches to nudge people away from irrationality.


Irrationality, decision under risk and ambiguity, nudge, incentive system, social influence

Preferred reference

Li, Z. (2014, December 18). Irrationality: What, Why and How (No. EPS-2014-338-MKT). ERIM Ph.D. Series Research in Management. Erasmus Research Institute of Management. Retrieved from

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