[ExI] Rational?? -- Don't make me laugh!

[Lee Corbin]

BillK writes

> The AGI list has drawn my attention to a NYT book review:
> <http://www.nytimes.com/2008/03/16/books/review/Berreby-t.html?ref=review>
>
> PREDICTABLY IRRATIONAL
> The Hidden Forces That Shape Our Decisions.
> By Dan Ariely.
> 280 pp. Harper/HarperCollins Publishers. $25.95.
>
> Quote:
> At the heart of the market approach to understanding people is a set
> of assumptions. First, you are a coherent and unitary self. Second,
> you can be sure of what this self of yours wants and needs, and can
> predict what it will do. Third, you get some information about
> yourself from your body — objective facts about hunger, thirst, pain
> and pleasure that help guide your decisions. Standard economics, as
> Ariely writes, assumes that all of us, equipped with this sort of
> self, "know all the pertinent information about our decisions" and "we
> can calculate the value of the different options we face." We are, for
> important decisions, rational, and that's what makes markets so
> effective at finding value and allocating work. To borrow from H. L.
> Mencken, the market approach presumes that "the common people know
> what they want, and deserve to get it good and hard."
>
> What the past few decades of work in psychology, sociology and
> economics has shown, as Ariely describes, is that all three of these
> assumptions are false.

Maybe that explains why markets work so badly in distributing
scarce resources, and why there are so many other economic
systems that work so much better---or at least, soon will work
so much better after we design them.  After all, we are so smart
that we can easily something superior to markets and capitalism.

Lee   (feeling a even a little nastier today than usual)

> A more accurate picture is that there are a bunch of different
> versions of you, who come to the fore under different conditions. We
> aren't cool calculators of self-interest who sometimes go crazy; we're
> crazies who are, under special circumstances, sometimes rational.

_________________________________________________________
     "Economics is the study of scarce resources which have alternative uses."
          -Thomas Sowell