Quantifying rationality

Administer a time-bound maths test to subject A, taking care to explain what the notation means ,etc.

If subject A fails to get a 100%, you can safely conclude subject A is not Homo Economicus. Subject A is acting irrationally.

You can now quantify the degree of rationality. Subject A getting 60% in a test covering the math of optimal asset allocation directly maps to Subject A being 60% rational when it comes to asset allocation decisions.

by datacharmer | Sunday, February 24, 2008
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