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Karacuka, Mehmet and Asad Zaman (2012) "The Empirical Evidence Against Neoclassical Utility Theory: A Review of the Literature" International Journal for Plurslism and Economics Education, Vol 3, No. 4, p366-414
This paper presents a tremendous amount of empirical evidence against the hypothesis that human beings maximize utilities as assumed in neoclassical utility theory (NUT). In fact, we show that NUT acts as a blinder, so that economists are unable to understand phenomena intuitively obvious to all normal human beings (illustrated by the cartoon). The paper is a bit long, and can be downloaded from the link given above in the title. Some other, shorter references related to this topic are also listed below.

Homo Economicus: Cold, Calculating and Callous : short article shows how microeconomic theory is based on extremely implausible assumptions about human behavior.

Economic Theory as Ideology: The persistence of economic theory in face of overwhelming empirical evidence to the contrary requires some explanation. This explanation is provided by the understanding that this theory is actually an ideology.

The Normative Foundations of Scarcity,” Real-World Economics Review, issue no. 61, 26 September 2012, pp. 22-39
This paper shows that while economic theory claims to be an objective and positive scientific theory, taking scarcity as the core of economics involves making several normative judgments. Thus, foundations of modern economic theory are normative, which lends further support to the conclusion that modern economics is an ideology. 




More references for failure of utility maximization

  1. Koppl-Rosser argue that maximization is impossible in situations where each party must find out what the other plans to do, in order to maximize. Infinite regress prevents one from knowing what the other will do, which knowledge is necessary for maximization..
  2. Endowment Effect & Mental Accounting: Easily observable behavior patterns (Richard Thaler) show that people use mental accounting patterns which are rather different from those assumed by utility theory 

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