Are Our Current Rational Decision-Making Models Truly Rational? A Critical Analysis and a New Neurobiological Framework
Abstract
This paper critically examines the foundational assumptions of rational decision-making models and finds them to be systematically and comprehensively flawed. Through a rigorous analysis of empirical evidence from behavioral economics and neuroscience, we demonstrate that traditional models, such as Expected Utility Theory, fail to account for the systematic biases and cognitive limitations inherent in human decision-making. We present a novel theoretical framework, Adaptive Neurobiological Rationality (ANR), which integrates dual-system processing, individual cognitive differences, and adaptive learning to provide a more descriptively accurate and normatively useful model of human choice. The ANR framework is validated against a wide range of empirical findings, including the Allais paradox, framing effects, and loss aversion. We conclude that a paradigm shift is necessary in decision science, moving away from the idealized assumptions of perfect rationality towards a more nuanced, neurobiologically grounded understanding of human behavior.
