4 ms·

Do you have an example of someone not acting in their (voluntary) self interest?

wpietri 9y ago
The whole field of behavioral economics [1] examines this question. It sees human rationality as sharply bounded [2] with an enormous set of cognitive biases. [3] The field is seen as a direct challenge to the notion of humans as rational actors. If you want examples, they are legion. Addicts, for example, clearly don't act in their own rational self interest. Whether it's substances (e.g., alcohol and other drugs) or experiences (like gambling and gaming), whole industries are built around exploiting people's inability to act in their self interest. Another example is advertising. In economic theory, advertising and PR are about informing people, giving them new facts. But when you look at actual advertising, it's about giving them new feelings, about manipulating their decidedly non-rational behavior. And there are plenty more. If you look the kinds of things consumer protection agencies get up to, you'll find plenty of examples. [1] https://en.wikipedia.org/wiki/Behavioral_economics https://en.wikipedia.org/wiki/Behavioral_economics [2] https://en.wikipedia.org/wiki/Bounded_rationality https://en.wikipedia.org/wiki/Bounded_rationality [3] https://en.wikipedia.org/wiki/Cognitive_bias https://en.wikipedia.org/wiki/Cognitive_bias [4] e.g., https://hbr.org/2009/07/the-end-of-rational-economics https://hbr.org/2009/07/the-end-of-rational-economics
- smokeyj 9y ago
  My point is humans have self-interest, and that humans act rationally to satisfy that self-interest. Not that the self-interest is "rational". An alcoholic who buys liquor is acting rationally according to his interest of getting drunk. Being an alcoholic may not be rational (to us). But I'd rather operate in an economic framework that doesn't judge the rationality of my interest, but that I have self interest and act rationally.
  - svachalek 9y ago
    There are plenty of behaviors like price anchoring that are irrational regardless of the supposed interest. The whole rational actor model is an interesting thought experiment, but naive.
    - smokeyj 9y ago
      > irrational regardless of the supposed interest. What does this mean?
  - jononor 9y ago
    What you've gotten is an economic framework where companies find and exploit every human weakness they can. And then the presumed self-interest and rationality of the individual is used as a way to make such behavior seem more legitimate.
  - wpietri 9y ago
    That is a circular definition of rationality: What's rational? What people do. How do we describe what people do? Whatever they do, it's rational. Your point about self-interest is similarly tautological. If people against their conscious choice do things they know are bad for them, which is what addicts do, then it seems absurd to me to define that as "self interest". I'd say "rational" should instead mean what it commonly does: "in accordance with reason or logic". And "self interest" should mean something like "to the actor's long-term benefit". In which case, people frequently act irrationally and against their self interest. Which is certainly what the field of behavioral economics has been demonstrating.
    - smokeyj 9y ago
      I think you're conflating self interest and best interest. In the case of banks, you have execs acting in their personal self interest and not in the long-term interest of the bank. Their long and short-term interests were not in alignment. This could be addressed by compensating execs with shares that are locked up for a period. To blame failure on irrationality is to not understand the motivations of the actors involved. Perhaps the risk of going out of business was mitigated by knowing they're "too big to fail". Perhaps it's not the banks that are irrational but the incentives given to them.
      - wpietri 9y ago
        You have introduced another dimension here, and I don't think it's helpful in resolving language about single individuals.
        smokeyj 9y ago
        We're using different definitions of self-interest. https://en.wikipedia.org/wiki/Self-interest https://en.wikipedia.org/wiki/Self-interest https://en.wikipedia.org/wiki/Ethical_egoism https://en.wikipedia.org/wiki/Ethical_egoism (your use) https://en.wikipedia.org/wiki/Psychological_egoism https://en.wikipedia.org/wiki/Psychological_egoism (my use) In the normative sense, any action that is "bad" is irrational. In the descriptive sense, there is no such thing as wrong self interest, therefore it can't be irrational. In that sense "rational self-interest" is tautological. Which is why in my original question I asked for "an example of someone not acting in their (voluntary) self interest". We can also reason in principle that markets don't require that people have their long-term best interest in mind. The market for cigarettes and fast-food is operating just fine. Sure customers might suffer for it, but the market aspect worked just fine.
MrFantastic 9y ago
Poor, out-of-work factory workers voting for a billionaire shyster.

The whole field of behavioral economics [1] examines this question. It sees human rationality as sharply bounded [2] with an enormous set of cognitive biases. [3] The field is seen as a direct challenge to the notion of humans as rational actors. If you want examples, they are legion. Addicts, for example, clearly don't act in their own rational self interest. Whether it's substances (e.g., alcohol and other drugs) or experiences (like gambling and gaming), whole industries are built around exploiting people's inability to act in their self interest. Another example is advertising. In economic theory, advertising and PR are about informing people, giving them new facts. But when you look at actual advertising, it's about giving them new feelings, about manipulating their decidedly non-rational behavior. And there are plenty more. If you look the kinds of things consumer protection agencies get up to, you'll find plenty of examples. [1] https://en.wikipedia.org/wiki/Behavioral_economics https://en.wikipedia.org/wiki/Behavioral_economics [2] https://en.wikipedia.org/wiki/Bounded_rationality https://en.wikipedia.org/wiki/Bounded_rationality [3] https://en.wikipedia.org/wiki/Cognitive_bias https://en.wikipedia.org/wiki/Cognitive_bias [4] e.g., https://hbr.org/2009/07/the-end-of-rational-economics https://hbr.org/2009/07/the-end-of-rational-economics

smokeyj 9y ago
My point is humans have self-interest, and that humans act rationally to satisfy that self-interest. Not that the self-interest is "rational". An alcoholic who buys liquor is acting rationally according to his interest of getting drunk. Being an alcoholic may not be rational (to us). But I'd rather operate in an economic framework that doesn't judge the rationality of my interest, but that I have self interest and act rationally.
- svachalek 9y ago
  There are plenty of behaviors like price anchoring that are irrational regardless of the supposed interest. The whole rational actor model is an interesting thought experiment, but naive.
  - smokeyj 9y ago
    > irrational regardless of the supposed interest. What does this mean?
- jononor 9y ago
  What you've gotten is an economic framework where companies find and exploit every human weakness they can. And then the presumed self-interest and rationality of the individual is used as a way to make such behavior seem more legitimate.
- wpietri 9y ago
  That is a circular definition of rationality: What's rational? What people do. How do we describe what people do? Whatever they do, it's rational. Your point about self-interest is similarly tautological. If people against their conscious choice do things they know are bad for them, which is what addicts do, then it seems absurd to me to define that as "self interest". I'd say "rational" should instead mean what it commonly does: "in accordance with reason or logic". And "self interest" should mean something like "to the actor's long-term benefit". In which case, people frequently act irrationally and against their self interest. Which is certainly what the field of behavioral economics has been demonstrating.
  - smokeyj 9y ago
    I think you're conflating self interest and best interest. In the case of banks, you have execs acting in their personal self interest and not in the long-term interest of the bank. Their long and short-term interests were not in alignment. This could be addressed by compensating execs with shares that are locked up for a period. To blame failure on irrationality is to not understand the motivations of the actors involved. Perhaps the risk of going out of business was mitigated by knowing they're "too big to fail". Perhaps it's not the banks that are irrational but the incentives given to them.
    - wpietri 9y ago
      You have introduced another dimension here, and I don't think it's helpful in resolving language about single individuals.
      - smokeyj 9y ago
        We're using different definitions of self-interest. https://en.wikipedia.org/wiki/Self-interest https://en.wikipedia.org/wiki/Self-interest https://en.wikipedia.org/wiki/Ethical_egoism https://en.wikipedia.org/wiki/Ethical_egoism (your use) https://en.wikipedia.org/wiki/Psychological_egoism https://en.wikipedia.org/wiki/Psychological_egoism (my use) In the normative sense, any action that is "bad" is irrational. In the descriptive sense, there is no such thing as wrong self interest, therefore it can't be irrational. In that sense "rational self-interest" is tautological. Which is why in my original question I asked for "an example of someone not acting in their (voluntary) self interest". We can also reason in principle that markets don't require that people have their long-term best interest in mind. The market for cigarettes and fast-food is operating just fine. Sure customers might suffer for it, but the market aspect worked just fine.

MrFantastic 9y ago

Poor, out-of-work factory workers voting for a billionaire shyster.