Normative rational choice theory: Past, present, and future

In this paper, we have tried to explain the normative turn in more recent work on experimental economics and behavioral economics. In section two, we discussed the various arguments that philosophers have offered in related to a normative interpretation of rational choice theory. We used the Friedman-Savage work on Expected Utility Theory as an example of the differences between the way that economists and philosophers see rational choice theory. We concluded that economists have traditionally equated the normative with ethically. In the third part, we examined the results of experimental and behaviorial economic literature with emphasis on the influence of experimental psychology. We presented a number of empirical anomalies and we agreed that representatives of economic psychology tend to view rational choice theory as a normative theory of rationality. In the last part, we examined some of the causes and consequences of the normative turn.