Are `Rational Conjectures' Rational?

Warning: is_dir(): open_basedir restriction in effect. File(/libraries) is not within the allowed path(s): (/home/web1050:/usr/share/php) in libraries_get_libraries() (line 176 of /home/web1050/public_html/sites/all/modules/contrib/libraries/libraries.module).

The concepts of `rational conjectures' and `reasonable conjectures' are critically reviewed. It is shown that their operation depends crucially on an invisible, non-optimizing `deus ex machina'. Hence, these concepts are not really suitable for understanding competition among optimizing firms. In addition, the widely claimed "fact" that Bertrand conjectures are locally rational conjectural variations is shown to be erroneous.