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Perfect rationality is impossible because in order to make correct decisions you need all the facts and a rational actor would do nothing at all given that all
by johnwheeler 5y ago
Perfect rationality is impossible because in order to make correct decisions you need all the facts and a rational actor would do nothing at all given that all the facts can’t be had. The best you can do is to be an odds maker;therefore, an odds maker would spend their time looking for as many of the lowest effort ventures with the highest chances of success and biggest payoffs relative to effort and chance. In their free time (time when no reasonable opportunities were present), they would learn as much as possible to increase decision making power thus odds of success.
- raldi 5y agoYour opening sentence makes no sense. If you and I don’t know the results of a coin toss, and I offer you a two-for-one wager on the result, the rational choice for you would be to take that bet, even without knowing the most relevant fact.
- johnwheeler 5y agoah, you should have read the second sentence
- raldi 5y agoI don't see how the second sentence makes sense of the first. A perfectly rational actor would not do nothing; they would carry out the most reasonable action given the information available.
- johnwheeler 5y agoBut then you're not being perfectly rational. You're calculating the odds, which is what my second sentence says. Being perfectly rational is impossible. See: perfect rationality vs bounded rationality
- raldi 5y agoMaybe I don't understand what you mean by "perfectly rational". I'm using the definition from the article: A perfectly calibrated individual will be right X% of the time about statements in which they are X% confident. Are you using a different definition?
- johnwheeler 5y agoPerfectly rational means just what it sounds like. Making the correct decision because you have all available data. Being perfectly rational is impossible.
- raldi 5y agoWould a perfectly rational person duck if there were a 50% chance they were about to be punched? Or would they do nothing?
- johnwheeler 5y agoA perfectly rational person would have all available information. Since ducking wastes energy vs. doing nothing, if they were going to get hit they would duck, and if not, they would do nothing. But again, being perfectly rational is impossible. I don't know how to make it any clearer.
- JohnPrine 5y agoI think you may have a confused definition of what it means to be a rational actor. Being rational means making the optimal decision given the information available
- johnwheeler 5y agoNo, you're confused. See https://en.wikipedia.org/wiki/Bounded_rationality https://en.wikipedia.org/wiki/Bounded_rationality