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So I hear what you're saying, but if that's the case then everyone, everywhere acts irrationally all the time. Because nobody is an oracle who knows how everyt

So I hear what you're saying, but if that's the case then everyone, everywhere acts irrationally all the time. Because nobody is an oracle who knows how everything will play out. Is that the point that you're trying to make? Nobody has perfect information. I guess what I was trying to describe is that people might act foolishly, but they don't know it's foolish. And most of the time we only know it's foolish in hindsight. At the time it might have been brilliant, but they went broke so it wasn't. If they'd made billions, it would have been genius. So basically most people have "facts" that they believe to be true, and use them to make decisions that in light of those "facts" are smart. Few people disregard all facts and reasons and just do whatever, or do something counter to what their facts tell them. What I'm describing might not be the economics definition of rationality, but it's closely tied to the colloquial definition and the idea that pops into my head when someone says "rational".

ska 11y ago
I think it's slightly more subtle than that. Often people have the information they need to make a rational decision, but they choose to discount, ignore, or misinterpret it. No decision based on this choice can meaningfully be called "rational" without stretching the definition of rationality to the useless. This is quite different that making a rational decision based on incomplete or imperfect information. Modeling human beings as rational actors, even in aggregate, is often a deeply flawed approximation for this reason.
Goladus 11y ago
> So I hear what you're saying, but if that's the case then everyone, everywhere acts irrationally all the time. More like: a sufficient number of independent agents (or aggregate populations behaving as an agent) behave irrationally often enough to make discrete predictions impossible.
- msandford 11y ago
  I don't think that predictions have anything to do with rationality. Just because YOU think people should behave one way with the information that YOU have doesn't necessarily have any bearing on what they will do. Especially since you don't know what information they have that you don't, and what information you have that they don't.
  - Goladus 11y ago
    Even when you know the information they have it's (currently) impossible to predict what someone will do. It's impossible to know what information they will care about, what they think is in their best interests versus what actually is in their best interests by a more objective standard, etc.
    - msandford 11y ago
      > It's impossible to know what information they will care about, what they think is in their best interests versus what actually is in their best interests by a more objective standard, etc. Don't you think it's a little crazy to say that someone else can know what's in a persons' best interests by a more objective standard? I feel like it's incredibly arrogant and belies a substantial lack of induction. You almost certainly believe that you know what's best for you. By induction we can conclude that everyone knows what's best for themselves, and that those who claim to know better are either charlatans or have a distinct lack of empathy.

ska 11y ago

I think it's slightly more subtle than that. Often people have the information they need to make a rational decision, but they choose to discount, ignore, or misinterpret it. No decision based on this choice can meaningfully be called "rational" without stretching the definition of rationality to the useless. This is quite different that making a rational decision based on incomplete or imperfect information. Modeling human beings as rational actors, even in aggregate, is often a deeply flawed approximation for this reason.

Goladus 11y ago

> So I hear what you're saying, but if that's the case then everyone, everywhere acts irrationally all the time. More like: a sufficient number of independent agents (or aggregate populations behaving as an agent) behave irrationally often enough to make discrete predictions impossible.

msandford 11y ago
I don't think that predictions have anything to do with rationality. Just because YOU think people should behave one way with the information that YOU have doesn't necessarily have any bearing on what they will do. Especially since you don't know what information they have that you don't, and what information you have that they don't.
- Goladus 11y ago
  Even when you know the information they have it's (currently) impossible to predict what someone will do. It's impossible to know what information they will care about, what they think is in their best interests versus what actually is in their best interests by a more objective standard, etc.
  - msandford 11y ago
    > It's impossible to know what information they will care about, what they think is in their best interests versus what actually is in their best interests by a more objective standard, etc. Don't you think it's a little crazy to say that someone else can know what's in a persons' best interests by a more objective standard? I feel like it's incredibly arrogant and belies a substantial lack of induction. You almost certainly believe that you know what's best for you. By induction we can conclude that everyone knows what's best for themselves, and that those who claim to know better are either charlatans or have a distinct lack of empathy.