Rational Behavior

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Dictionary Says

Definition of 'Rational Behavior'

A decision-making process that is based on making choices that result in the most optimal level of benefit or utility for the individual. Most conventional economic theories are created and used under the assumption that all individuals taking part in an action/activity are behaving rationally.  
Investopedia Says

Investopedia explains 'Rational Behavior'

Rational behavior does not necessarily always involve receiving the most monetary or material benefit, because the satisfaction received could be purely emotional. For example, while it would be more financially lucrative for an executive to stay on at a company rather than retire early, it would still be considered rational behavior for her to seek an early retirement if she feels that the benefits of retired life outweigh the utility from the paycheck that she receives.
Search results for

'Rational Behavior'

  • Understanding Investor Behavior

    http://www.investopedia.com/articles/05/032905.asp
    ... Market Hypothesis.) But, researchers questioning this assumption have uncovered
    evidence that rational behavior is not always as prevalent as we might believe. ...

  • Understanding Investor Behavior

    http://www.investopedia.com/articles/05/032905.asp?partner=aol-d
    ... Market Hypothesis.) But, researchers questioning this assumption have uncovered
    evidence that rational behavior is not always as prevalent as we might believe. ...

  • Mad Money ... Mad Market?

    http://www.investopedia.com/articles/06/madmoney.asp
    ... t Go Mad Yourself EMH relies on the assumption that the main players in the market
    are rational. This study is an example of how irrational behavior can cause ...

  • A Practical Look At Microeconomics

    http://www.investopedia.com/articles/economics/08/understanding-microeconomics.asp
    ... This concept is called rational behavior or rational decision-making. Businesses
    make decisions based on the competition they face in the market. ...

  • The Stock Market Secret

    http://stocks.investopedia.com/stock-analysis/2009/The-Stock-Market-Secret-GS-BPO-TA-TGT-BAC1125.aspx
    ... investors. Acting on emotion, instead of rational behavior, many were dumping
    stocks late last year and early this year out of fear. Today ...

  • This Is Your Brain On Stocks

    http://www.investopedia.com/articles/stocks/08/mind-behavior-investing.asp
    ... and pain centers of the brain were most active, but the rational center was ... A setback
    prompted risk averse behavior and a gain prompted risk-seeking behavior ...

  • 3 Psychological Quirks That Affect Your Trading

    http://www.investopedia.com/articles/trading/10/psychological-quirks-killing-trading.asp
    ... These deviations from rational behavior lead to irrational actions, causing investors
    to miss out on potential gains, due to psychological biases. ...

  • Now's A Great Time For Watchlists

    http://stocks.investopedia.com/stock-analysis/2010/Nows-A-Great-Time-For-Watchlists-GS-LUK-JEF-STRL0510.aspx
    ... Indeed the sharper the rally, the more poignant the correction. Investors
    should not let fear an emotion overcome rational behavior. ...

  • Traders: Profit From Other Investors' Fear

    http://www.investopedia.com/articles/trading/07/buyfear.asp
    ... Money, and the thought of making or losing it, has a way of driving an
    otherwise rational person to incredibly irrational behavior. ...

  • Psychopaths In The Trading Room

    http://www.investopedia.com/articles/financial-theory/12/Destructive-Behavior-In-The-Trading-Room.asp
    ... Trading behavior can be not only ethically bad, but also psychologically twisted ...
    Trading should be a rational business activity, with the sole objective of ...

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