Saturday, September 24, 2011

Rationality and Optimizing Behavior are not the Same Thing

A great post from John Quiggin. A very good critique of my grouchy intermediate macro textbook author (it is a good book, actually).


  1. Rationality isn't what it is cracked up to be; so I'm always surprised to see economists having such disagreements over it.

    The normative stuff comes first and then the rational stuff follows that as a handmaiden.

    This is why people disagree about religion and any number of things and why their arguments are so unconvincing to the opposing contestants.

  2. While I agree with the anonymous fellow above, didn't Daniel Ellsberg poke a hole in the Rational Actor Model by revealing a paradox in the expected utility hypothesis (and thus, question Subjective Expected Utility)?

    P.S. Daniel Kuehn, what is your opinion of Subjective Expected Utility, anyway?

  3. Blue...

    I was tinkering around in my head with how Etzioni describes rationality.

  4. Anonymous: Well, I wasn't aware of Etzioni until you mentioned his name. I apologise for misinterpreting your message, since I'm not that knowledgable about sociology. Nonetheless, I think that my mention of Daniel Ellsberg into this equation is legitimate, and economists have been incorporating altruistic motives into their research.

  5. On a totally unrelated point (apologies for that), I have a new post here that might be of interest, not least of all because I want feedback on it:

  6. Blue,

    Wasn't correcting you are anything of the kind; just telling you where I am coming from.

    Coincidentally this recently showed up in my iTunes podcast queue:

  7. Anonymous: I see. Speaking of perspectives on rationality, I think you might enjoy reading this paper.


All anonymous comments will be deleted. Consistent pseudonyms are fine.