Violations of \"rational\" heuristics
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Rational for an economist only means that preferences are transitive. Nothing more.
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Even when we discount Cancellation, Dominance, and Invariance and stick only to Transitivity, we are still in trouble!
But we see people routinely processing information differently when making choices and when setting 'prices' for these choices, which violates transitivity.
Phenomena of preference reversals are common. When something is observed routinely, its occurence ceases to be a mere glitch and demands the reconsidertion of what we call "rational" and what "irrational". Hausman famously castigated economists for their refusal to "abandon a single systematic and parsimonious theory of choice that is also a theory of rational choice."
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