Berg, Nathan and Gigerenzer, Gerd (2006): Peacemaking among inconsistent rationalities? Published in: In Englel, C. and Daston, L. (eds,), Is There Value in Inconsistency (2006): pp. 421-433.
Download (209kB) | Preview
Kacelnik, Schuck-Paim and Pompilio (this volume, p. 377) show that rationality axioms from economics are neither necessary nor sufficient to guarantee that animal behavior is biologically adaptive. To illustrate that biological adaptiveness does not imply conformity with the consistency axioms of economics, Kacelnik et al describe animals that sensibly experiment with actions yielding sub-maximum levels of short-term energy intake to monitor their environments for change, leading to apparently intransitive patterns of choice that are nevertheless biologically adaptive. Invalidating the converse claim that economic rationality implies biological adaptiveness is Kacelnik et al’s example of female ruffs that are worse off when they conform to the constant-ratio rule, frequently interpreted as a normative consistency requirement of economic rationality. Together, the two examples demonstrate that axiomatic norms are both unnecessary and insufficient for determining whether a particular behavior is biologically adaptive. Additionally, Kacelnik et al call into question what has been reported in the animal behavior literature as preference reversals, such as risk attitudes among wild rufous hummingbirds or the food-hoarding propensities of grey jays. Kacelnik et al attribute apparent reversals to state-dependent fitness functions modulated by subtle differences in the training phase of animal experiments. For example, animals trained on menus that include a strictly dominated option will tend to have lower accumulated energy reserves and therefore exhibit systematically different patterns of choice––not because they fail to maximize, but because their training has induced systematically different nutritional states. Another possible explanation for preference reversals in animal studies with strictly dominated, or “decoy” options is that menus containing dominated items may convey valid information about future opportunities (Houston and McNamara, 1999). If menus are correlated through time, then menus with inferior options today predict scarcity in the future and imply a distinct optimal course of action, in violation of regularity assumptions that posit invariance with respect to the inclusion of strictly dominated alternatives. In environments with payoff structures that can be modeled as cooperative games, a family’s best response sometimes requires individual family members to behave suboptimally as part of a diversification strategy that reduces the risk of reproductive failure (Hutchinson, 1996). Futhermore, theoretical biologists have documented the fragility of expected fitness maximizing behaviour with respect to the assumption of stable environments. Once the model allows for shocks to the environment’s stochastic structure, simple behavior rules that are suboptimal (in terms of expected fitness) when viewed narrowly from the perspective of unchanging payoffs in a fixed environment may outperform rules based on maximazation within a static small world (Bookstaber and Langsam, 1985).
|Item Type:||MPRA Paper|
|Original Title:||Peacemaking among inconsistent rationalities?|
|Keywords:||Rationality, rationalities, irrationality, bounded rationality, biology, biological rationality|
|Subjects:||D - Microeconomics > D0 - General > D03 - Behavioral Microeconomics: Underlying Principles|
|Depositing User:||Nathan Berg|
|Date Deposited:||10. Nov 2010 18:10|
|Last Modified:||31. Dec 2015 00:05|
Arrow, K.J. (1951) Social Choice and Individual Values, Wiley, New York.
Arrow, K.J. and Hahn, F.H. (1971) General Competitive Analysis, North Holland, Amsterdam.
Becker, G. (1996) Accounting For Tastes, Harvard University Press, Cambridge.
Bookstaber, R. and Langsam, J. (1985) On the optimality of coarse behavior rules, Journal of Theoretical Biology 116, 161-193.
Brandstätter, E., Gigerenzer, G. and Hertwig, R. (2006) The priority heuristic: Making choices without trade-offs, Psychological Review, 113, 409-432.
Camerer, C.F., Loewenstein, G. and Rabin, M. (2003) Advances in Behavioral Economics, Princeton University Press, Princeton.
Choi, J.J., Laibson, D., Madrian, B.C. and Metrick, A. (2005) Optimal defaults and active decisions, NBER Working Paper W11074.
Conlisk, J. (1996) Why bounded rationality?, Journal of Economic Literature 34, 669- 700.
Debreu, G. (1959) The Theory of Value, Wiley, New York.
Erev, I., Wallsten, T.S. and Budescu, D.V. (1994) Simultaneous over- and underconfidence: The role of error in judgment process, Psychological Review 101, 519-27.
Fehr, E. and Schmidt, K. (1999) A theory of fairness, competition and cooperation, Quarterly Journal of Economics 114, 817-868.
Gigerenzer, G. (1996) On narrow norms and vague heuristics: A reply to Kahneman and Tversky (1996), Psychological Review 103, 592-596.
Gigerenzer, G. (2000) Adaptive Thinking, Oxford University Press, New York.
Gigerenzer, G. (2004) Fast and frugal heuristics: The tools of bounded rationality, In D. Koehler and N. Harvey (Eds.), Blackwell handbook of judgment and decision making (pp. 62–88), Blackwell, Oxford, UK.
Gigerenzer, G. and Selten, R. (2001) Bounded Rationality: The Adaptive Toolbox, MIT Press, Cambridge.
Gigerenzer, G., Todd, P.M. and the ABC Research Group (1999) Simple Heuristics That Make Us Smart, Oxford University Press, New York.
Houston, A.I. and McNamara, J.M. (1999) Models of Adaptive Behaviour, Cambridge University Press, New York.
Hutchinson, J.M.C. (1996) Evolution in fluctuating environments: A game with kin, TREE 11(6), 230-232.
Jolls, C., Sunstein, C.R. and Thaler, R.H. (1998) A behavioral approach to law and economics, Stanford Law Review 50, 1471-1541.
Kahneman, D. (2003) Maps of bounded rationality: Psychology for behavioral economics, American Economic Review 93,1449-1475.
Kahneman, D., Slovic, P. and Tversky, A. (1982) Judgment Under Uncertainty: Heuristics and Biases, Cambridge University Press, New York.
Kahneman, D. and Tversky, A. (1982) On the study of statistical intuitions, In D. Kahneman, P. Slovic, and A. Tversky (eds.), Judgment under uncertainty: Heuristics and biases (pp. 493-508), Cambridge University Press, Cambridge.
Kirman A.P. (1993) Ants, rationality and recruitment, The Quarterly Journal of Economics 108, 137-156.
Mas-Colell, A., Winston, M.D. and Green, J.R. (1995) Microeconomic Theory, Oxford University Press, New York.
Oaksford, M. and Chater, N. (1994) A rational analysis of the selection task as optimal data selection, Psychological Review 101, 608-631.
O'Donoghue, T. and Rabin, M. (2003) Studying optimal paternalism, illustrated by a model of sin taxes, American Economic Review 93(2), 186-191.
Rubinstein, A. (1998) Modeling Bounded Rationality, MIT Press, Cambridge.
Sen, A. (1993) Internal consistency of choice, Econometrica 61(3), 495-521.
Sen, A. (1997) Maximization and the act of choice, Econometrica 65(4), 745-779.
Simon, H.A. (1978) Rationality as process and as product of thought, American Economic Review 68(2), 1-16.
Simon H.A. (1999) The potlatch between economics and political science, In Alt, J., Levi, M., and Ostrom, E. (eds.) Competition and Cooperation (pp 112-119), Russell Sage, New York.
Smith, V.L., (2003), Constructivist and ecological rationality in economics, American Economic Review 93(3), 465-508.
Thaler, R.H. (1991) Quasi-Rational Economics, Russell Sage Foundation, New York.
Thaler, R.H. and Sunstein, C.R. (2003) Libertarian paternalism, American Economic Review 93, 175-179.
Trout, J.D. (2005) Paternalism and cognitive bias, Law and Philosophy 24, 393-434.