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November 06, 2014

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Luis Enrique

I don't have the cite, but remember reading a game theory paper saying that irrational players do better in repested games because rational players are predictable and that can be exploited

Luis Enrique

I have heard famed game theorist Ken Binmore pour scorn on the idea that people should be more 'rational' - here is (free pdf.) the first chapter of his book on rational decisions, which imho is a tour de force

http://press.princeton.edu/chapters/s8902.pdf

Icarus Green

Great post. Going off on a tangent here but what should we make socially prescribed/endorsed irrationality? (i.e. religion)

To take your example of crime. I might rationally think mugging someone is risk free and I won't get caught but my religious belief says I'll burn in hell so I don't do it. Isn't that irrationality socially optimal?

Perhaps not, when you consider that people will then take their marching orders from used car salesmen and quacks (i.e religious leaders) rather than scientists leading in the long run to socially non-optimal outcomes.

Rob

"irrational players do better in repested games because rational players are predictable and that can be exploited"

In which case, isn't behaving predictably the irrational thing to do, and behaving unpredictably a rational course of action? I'd imagine that such behaviour could be observed in chess, tennis, boxing etc.

A rational actor should be more like an improviser rather than an actor working from a script, because it's the height of irrationality to continue acting out a role in ignorance of the world around you. The interesting question is whether "irrational" people find it easier to improvise than "rationalists".

I recently started doing some improv theatre and also consider myself to be a rational person, and the hardest thing to learn has been letting go of my desire to predict the flow of the scene ahead of time. If rationalists are people who like to make predictions and pattern-match from past experience, they might find it more difficult to respond to some unexpected pattern-breaking move, because they have already prematurely built some theory of what is going to happen next. Irrationalists may simply lack the belief that this is a worthwhile thing to do, and so be more able to respond spontaneously in an appropriate way.

Luke

I think I read somewhere (here?) about depressives being better or more rational investors. That might be an example of complete rationality not being an optimal strategy for life.

rogerh

I think there is a question hanging here - are the nudges being offered advantageous for the nudger or the nudgee or are they in some pure sense 'rational'?

Cannot help feeling that Duncan Smith will have his own ambitions in mind when he suggests I become a self employed brain surgeon. On the other hand a truly rational nudge might for some people be 'keep on with the shoplifting'.

PG

Hum, my Straw Vulcan Rationality sensor is detecting something :)

http://measureofdoubt.com/2011/11/26/the-straw-vulcan-hollywoods-illogical-approach-to-logical-decisionmaking/

Terriblemisu

I think you're being a little unfair, here:

Alcoholics sometimes try to stay sober by over-estimating the cost of a drink: "another one will kill me."

You're being more literal than the alcoholics who say this. They realize that 1 drink + never again is probably fine. But they believe that 1 drink will necessarily lead to many more in the future. (Usually, the very near future.) It's not about 1 drink, per se. It's about the change in personality and preferences that results.

Jason Smith

Here's a wildly different take (in regard to macroeconomic outcomes, not necessarily micro outcomes): the "rationality" that appears in markets is independent of actual rationality ... and in fact independent of human decisions

http://informationtransfereconomics.blogspot.com/2014/08/rationality-and-entropic-forces.html

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