Abstract & Overview
The concept of rational behavior has a significant role in economics and the analysis of market economy and general equilibrium.Moreover, there exists a logical relationship between the limits of rationality and learning from error.Through explaining the concept of rational behavior in neoclassical economics and its relationship with the rational expectation hypothesis this article addresses the following two questions: First, has the idea of learning from error played a role in the formation of the neoclassical concept of rational behavior?If not, secondly, can this idea play a role in improving the meaning of rational behavior in economics?In response to these questions, the article goes through the following discussions: (a) the neoclassical concept of rational behaviors is reviewed and the critiques of behavioral economics and the theories of choice under uncertainty are discussed, (b) the rational usage of information and its relationship with the meaning of rational behavior are examined, and in this context, the importance of the idea of learning from error is explored, and (c) Karl Popper's theory of rationality as openness to criticism and its consequence for the idea of learning from error in terms of conjecture and refutation will be discussed.The article finally uses the Austrian economists', i.e.Hayek and Krizner, critiques regarding the neoclassical concept of rational behavior in order to demonstrate that Popper's theory of rationality can improve the concept of rational behavior in economics.