II

 

Some thoughts on whether R.E.P. should R.I.P.

[R.E.P: Rational Economic Person]

[R.I.P: Tombstone inscription, ‘Rest In Peace’]

 

  1. Is the emphasis on what it is rational to do misleading because (Hahn) ‘all [that is] meant is correct calculations and an orderly personality’ (which he allows may not hold universally but suggests applies well to a range of economic contexts)?  Or is Hollis right to say that ‘it does matter that the theory is concerned with the concept of rationality and whether it is right about it’ (with the implication drawn by Sugden in his Economic Journal 1991 survey of rational choice that ‘economic theorists may have to become as much philosophers as mathematicians’)?

 

  1. Consistency alone is an insufficient criterion for rationality (could you be consistent in pursuit of irrational aims? [Consider consistent minimising]). (Plus Sen’s point that consistency is really a characteristic of statements rather than of actions over time).

 

  1. Could it be that consistency is not a necessary criterion either?  Limitations of the transitivity and completeness requirements: examples from Anand (another use of the dinner party fruit bowl; development project selection) and Sugden (Jane not savagely indifferent).  But can the examples be recast to rescue the theory? (Broome; Anand’s recognition that ‘formally…any ‘intransitive’ behaviour can be given a transitive description’).  What however is lost by this formal move?

 

  1. Possibility that conventional rationality may be self-defeating in game theoretic contexts (Sugden).

 

  1. ‘Twisted’ rationality (Tversky and Kahneman’s psychological evidence: framing effects; cognitive dissonance [‘in love with our own ideas’]).  Will ‘twisted’ rationality be eliminated, though, by a process of natural selection?  Not necessarily, as ‘cognitive error may serve a higher rationality’ [parenting example, Matthews].

 

  1. Problems in the ‘correct calculations’ approach.  Simon: ‘bounded’ rationality; ‘satisficing’; ‘substantive rationality versus procedural rationality.  How much of a defence is the possibility of modelling satisficing as maximising subject to additional constraints?

 

  1. The problem of uncertainty about the future consequences of our choices: Simon, Keynes and Hume on this, and on the response of resorting to ‘conventional’ behaviour.

 

 

(Dr. J G T Meeks)