3 ms·
This article makes much of rationality, but the concept of a rational actor in economic terms is really way more complicated and sophisticated than these sorts
by CPLX 11y ago
This article makes much of rationality, but the concept of a rational actor in economic terms is really way more complicated and sophisticated than these sorts of analyses. So much so that it's possible to argue that there is no such thing as an objectively defined rational actor at all.
To do my best to shorthand the issue, assume that a rational actor is defined as someone who takes the course of action presumed to have the greatest likelihood of a positive (or the most positive) outcome. In order to evaluate their current strategy for rationality you have to have forward looking prescience to determine if the strategy is in fact the most probable to lead to the desired outcome.
This runs headlong into the issue of uncertainty, familiar stuff like sensitive dependence on initial conditions or just simple complexity.
For a thought experiment, consider a game such as chess. The game is completely discrete, all possible game states can be easily defined, the rules are known, and there is no element of random chance or rules changing during the game.
Nonetheless, the idea that you can put an average person in front of a chess board and say "OK, play rationally" and expect everyone to cheerfully plot out the exact same sequence of moves is obviously ludicrous. There are too many possible outcomes and threads to reason about fully, there are competing priorities in any strategy, etc.
Then when confronting an economic system that is certainly as or more complex than a simple game of chess, we expect rational economic decisions to be an objective truth?