Rational irrationality

Rational irrationality

The concept known as rational irrationality was popularized by economist Bryan Caplan in 2001 to reconcile the widespread existence of irrational behavior (particularly in the realms of religion and politics) with the assumption of rationality made by mainstream economics and game-theory. The theory, along with its implications for democracy, was expanded upon by Caplan in his book The Myth of the Rational Voter.

The original purpose of the concept was to explain how (allegedly) detrimental policies could be implemented in a democracy, and, unlike conventional public choice theory, Caplan posited that bad policies were selected by voters themselves. The theory has also been embraced by the ethical intuitionist philosopher Michael Huemer as an explanation for irrationality in politics. The theory has also been applied to explain religious belief.

Theory ### Two types of rationality, and preferences over beliefs Caplan posits that there are two types of rationality: Epistemic* rationality, which roughly consists of forming beliefs in truth-conducive ways, making reasonable efforts to avoid fallacious reasoning, and keeping an open mind for new evidence. Instrumental* rationality, which involves choosing the most comprehensively effective means to attain one's actual goals, given one's actual beliefs.

Rational irrationality describes a situation in which it is instrumentally rational for an actor to be epistemically irrational.

Caplan argues that rational irrationality is more likely in situations in which: people have preferences over beliefs, i.e., some kinds of beliefs are more appealing than others and the marginal cost to an individual of holding an erroneous (or irrational) belief is low.

In the framework of neoclassical economics, Caplan posits that there is a demand for irrationality. A person's demand curve describes the amount of irrationality that the person is willing to tolerate at any given cost of irrationality. By the law of demand, the lower the cost of irrationality, the higher the demand for it. When the cost of error is effectively zero, a person's demand for irrationality is high.

Rational irrationality versus doublethink Rational irrationality is not doublethink and does not state that the individual deliberately chooses to believe something he or she knows to be false. Rather, the theory is that when the costs of having erroneous beliefs are low, people relax their intellectual standards and allow themselves to be more easily influenced by fallacious reasoning, cognitive biases, and emotional appeals. In other words, people do not deliberately seek to believe false things but stop putting in the intellectual effort to be open to evidence that may contradict their beliefs.

Sources of preferences over beliefs For rational irrationality to exist, people must have preferences over beliefs: certain beliefs must be appealing to people for reasons other than their truth value. In an essay on irrationality in politics Michael Huemer

Wittman's theory of democratic success Donald Wittman has argued that democracy works well. Wittman's argument rests on raising a number of objections to public choice theory, such as those outlined above while contrasting public choice theory and rational irrationality. Caplan described his own work on rational irrationality as an attempt to rescue democratic failure from Wittman's attacks. After the publication of Caplan's book, Wittman and Caplan debated each other.

See also * Behavioral economics * [[bounded-rationality]] * Choice architecture * Cognitive miser * Dysrationalia Predictably Irrational* * Psychohistory * [[rational-ignorance]] Rationality and Power* * Satisficing * Social heuristics * Subjective theory of value

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