Are economists more reluctant to relax the assumption of perfectly rational decision-makers compared to relaxing other assumptions, such as absence of externalities or absence of transaction cost etc? If so, why?
Personally, I do not think that this is the case. Doesn't a lion's share of research in behavioral economics showcase that the assumption of perfectly rational decision-makers is challenged frequently?
I see many contributions in BE reject perfect rationality. Do you see many examples of economists/behavioral economsts relaxing the perfect rationality assumption?
Fair point. :-) I got your initial question wrong. But sill, I think there are many examples in BE relaxing the assumption of perfectly rational decision-makers by modeling non-standard preferences (the literatures on distributional concerns, social preference, guilt aversion, etc., for instance).
Yes, but it seems some of the papers in this literature suggeste that selfishness is synonymous with rationality, thus creating confusion. Altruism is rational. Large parts of the BE literature contribute to knowledge on what people are not doing, but contribute less on what people are doing.
Agree - but isn't it simply because a model of "homo oeconomicus" is considered the null hypothesis for many behavioral settings? Wouldn't research without a null model be like fishing in muddy waters? What would be an alternative?
Relaxed assumptions. Homo Economicus could be relaxed, to boundedly rational. Just like
-perfect info was relaxed to asymmetric info-> information Econ
-absence of externalities relaxed to specific externalities being present
->environmental economics
Absense of market power relaxed to presence if specific types of market power
-> Industrial Org.
Economics has been about relaxing assumptions. But not much about imperfect rationality in specific forms.