TITLE:
Economic and Emotional Rationality: An Application to Wealth Concentration
AUTHORS:
Jose Rigoberto Parada-Daza, Miguel Ignacio Parada-Contzen
KEYWORDS:
Utility Function; Emotional Well-Being; Economic Rationality; Emotional Rationality; Concentration of Wealth
JOURNAL NAME:
Theoretical Economics Letters,
Vol.3 No.4,
July
19,
2013
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.