Saturday, September 24, 2011

Rationality and Optimizing Behavior are not the Same Thing

Posted by dkuehn at 5:07 PM
A great post from John Quiggin. A very good critique of my grouchy intermediate macro textbook author (it is a good book, actually).

7 comments:

  1. AnonymousSeptember 24, 2011 at 8:49 PM

    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.

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  2. Blue AuroraSeptember 25, 2011 at 1:07 AM

    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)?

    http://www.amazon.com/Risk-Ambiguity-Decision-Studies-Philosophy/dp/0815340222

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

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  3. AnonymousSeptember 25, 2011 at 9:29 AM

    Blue...

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

    ReplyDelete
  4. Blue AuroraSeptember 25, 2011 at 10:32 AM

    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.

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  5. Lord KeynesSeptember 25, 2011 at 2:35 PM

    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:

    http://socialdemocracy21stcentury.blogspot.com/2011/09/did-hayek-advocate-public-works-in.html

    ReplyDelete
  6. AnonymousSeptember 25, 2011 at 7:29 PM

    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: http://hw.libsyn.com/p/8/3/b/83be9e73687b7529/Dan_Sperber_on_the_Enigma_of_Reason.mp3?sid=c9fd6b069be2f09744ff391b04ec8c9e&l_sid=18828&l_eid=&l_mid=2726968

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  7. Blue AuroraSeptember 26, 2011 at 12:18 AM

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

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1728225

    ReplyDelete

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