[ExI] What is Rational? (BillK)

[Mirco Romanato]

Il 11/08/2010 21.24, BillK ha scritto:


> Behaving irrationally is what makes people 'human'.
> (As opposed to being cold emotionless calculating machines).
> 
> The whole travesty of the 'Efficient Market Theory' collapsed because
> people didn't behave rationally. I am really surprised that you don't
> seem to know about the many studies in psychology, marketing,
> philosophy, etc. showing that human decision-making is based on
> emotions, likes, dislikes, herd instinct, peer pressure, status, etc.
> and not on logical analysis.

Good reasons to support a reduction of the size of the governments.
Who want this type of people wield so large power on their fellows citizens?

> Humans are notorious for making bad decisions that damage their lives,
> friends and family. You know- It seemed like a good idea at the time.

Obama!!! They are talking about you.

> Some googling found many references to human irrational behaviour, but
> this is too big a subject to be solved by quoting a couple of links.

> We'll have to just view humanity from opposite poles.


You show that your understanding of economics is very lacking; this is
usually the problem of people sure to know and understand.

>From a Austrian perspective, "action" is what is done with a purpose in
mind.
It is what make intelligent beings different from animals and plants or
machines. If there is not a conscious purpose, there is not action but a
reflex or an effect.
Austrians don't postulate that the course of action taken from an
individual or a group is the best or the most "efficient" to obtain a
goal. Only that the action is taken with a clear goal and people believe
these actions will cause, in the future, to obtain (or raise the chance
to) the goal.
Often, given the lacking of perfect informations and perfect ability to
analyze them and fast enough ability to analyze the informations people
choose an not optimal course of action (who have perfect informations,
analyzing skill and analyzing speed anyway?).

People don't behave rationally (in your eyes) because large part of the
time they are reacting and not acting, behaving reflexively and not
thinking the course of action. In a word, they are with the autopilot on.

Would You throw away the Newton Law's on account that attrition exist
always? Or that at low levels there is the brownian motion or the
Quantum Mechanics?

Efficient market theory is sound, from what I understand.
It explain many things happening. And when the results are different,
you can look for "noise" or different conditions that caused a different
outcome.

-- 
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*Mirco Romanato*

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