Rational behavior and economic theory

Article Abstract:

The idea of rationality in economic theory was analyzed and found to be unnecessary. The principle of rationality in economic literature only started in the 1960s. Most economic theories are correct in their assumption that economic behavior is a result of the individual selecting from several choices and opportunities with his/her own self-interest as primary factor. The concept of rationality goes against the idea of self-interest as the main motivating factor in economic behavior.

Uncertainty

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Agency costs, asset specificity, and the capital structure of the firm

Article Abstract:

A dynamic model is developed in order to utilize the asset specifity and agency cost literature relating to corporate finance. The impact of these factors on corporate capital structure is assessed.

Economic aspects, Finance, Corporations, Corporate finance, Capital

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