The vast majority of economists using the rationality assumption (homo oeconomicus) do not claim that real individuals are portrayed by the assumed rational, utility maximizing individuals. Instead of stressing similarities to realistic behavior, proponents of the rationality approach defend the assumption to be a useful as if construct due to evolutionary (competitive) forces. Examining the validity of the as if defense it is useful to consider one of the preconditions for as if constructs. This precondition concerns the fact that the assumption of rational maximization under well-defined constraints requires separability and independence of tastes and constraints. If, for instance, preferences are interrelated with rules and institutions in a systematic way, the rationality assumption is hardly applicable to institutional economics. If we want to understand the formation of rules and institutions and if we consider their motivational impact it seems unavoidable to deal with some basic properties of human motivation and action. It will be argued that it is at least possible to identify some economic phenomena with respect to which it is very problematic to employ the rationality assumption (e.g. decisions under uncertainty, institutional economics, the emergence of entitlements, obligations and morals).
The problems concerning the rationality assumption require the consideration
of a comprehensive psychological model. Modern psychology, characterized by
a tremendous heterodoxy in psychological reasoning and by concentrating not
on a comprehensive theory of man but on a vast number of diverse psychological
effects, is not very helpful. However, there is a promising alternative psychological
approach. Based on the work of KöHLER, KOFFKA, and WERTHEIMER, Solomon
ASCH outlines a very thorough and comprehensive social psychology. ASCH's theory
centers on basic principles in pattern recognition, concept formation, simplicity,
clarity and grouping as well as on the interrelationship between cognitions,
emotions, motivations and human behavior.