[extropy-chat] Rational Irrationality (2)
hkhenson at rogers.com
Thu Dec 7 02:59:06 UTC 2006
At 07:42 AM 12/6/2006 -0500, Dan wrote:
>"Rational Ignorance vs. Rational Irrationality" (_Kyklos_ 54(1), 2001,
>"Beliefs about politics and religion often have three puzzling
>properties: systematic bias, high certainty, and little informational
>basis. The theory of rational ignorance (Downs 1957) explains only the
>low level of information. The current paper presents a general model of
>"rational irrationality," which explains all three stylized facts.
>According to the theory of rational irrationality, being irrational - in
>the sense of deviating from rational expectations - is a good like any
>other; the lower the private cost, the more agents buy. A peculiar
>feature of beliefs about politics, religion, etc. is that the private
>repercussions of error are virtually nonexistent, setting the private
>cost of irrationality at zero; it is therefore in these areas that
>irrational views are most apparent. The consumption of irrationality can
>be optimal, but it will usually not be when the private and the social
>cost of irrationality differ - for example, in elections."
It pains me to read such egregious nonsense.
"Consumption of irrationality"? "Private cost of irrationality at zero"?
Off hand there is little more irrational than blowing yourself up as a
suicide bomber. I don't know how anyone could set this cost at zero.
At least experiments like the Ultimatum game and finding the actual brain
structures active when people refuse an offer they should (if rational)
take is starting to inform economics with a bit of evolutionary psychology.
The *one* thing for sure is that over evolutionary time genes are rational
(1). If you look under human irrationality, you find rational reasons for
the genes to induced such behavior, or at least there were such reasons
when people lived in small related hunter gatherer bands.
(1) The implied goal for genes is to "be there" in future generations.
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