Final answer:
People preferring the rational style make decisions by weighing perceived benefits against perceived costs, acting in a manner that they believe maximizes personal benefit according to traditional economic models. Behavioral economics, however, observes and explores the systematic 'irrational behavior' people exhibit, suggesting deeper reasons for these actions. Rationalism, as a philosophical approach, emphasizes the importance of reason as the source of knowledge.
Step-by-step explanation:
People preferring the rational style are assumed to make decisions that are informed and in their own best interest. These individuals engage in a decision-making process where they compare the value of perceived benefits and costs. They choose an action when the benefits are perceived to outweigh the costs, and they tend to not engage in an action if the costs are perceived to exceed the benefits.
Traditional economic models are based on the principle of rationality, assuming individuals will always act rationally to maximize their utility. However, behavioral economics challenges this assumption by exploring why people often exhibit "irrational behavior"—making decisions contrary to their own best interest, which can appear inconsistent and even wasteful. Behavioral economists suggest that there may be underlying, systematic reasons for this seemingly irrational behavior.
Rationalism in philosophy also relates to this concept, as it emphasizes reliance on reason as the primary source of knowledge and understanding, contrasting with empirical methods that depend on sensory experience. The debate between rational and irrational behaviors continues, particularly within the field of economics where inconsistencies in human behavior are acknowledged and examined.