There is a collection of exogenously given socially feasible sets, and, for each one of them, each individual in a group chooses from an individually feasible set. The fact that the product of the individually feasible sets is larger than the socially feasible set notwithstanding, there arises no conflict between individual choices. Assuming that individual preferences are random, I characterize rationalizable collective choices.

Common-sense (or folk) psychology holds that (generally) we do what we do for the reasons we have. This common-sense approach is embodied in claims like ‘I went to the kitchen because I wanted a drink’ and ‘She took a coat because she thought it might rain and hoped to stay dry’. However, the veracity of these common-sense psychological explanations has been challenged by experimental evidence (primarily from behavioural economics and social psychology) which appears to show that individuals are systematically irrational—that (...) often we do not do what we do because of the reasons we have. Recently, some of the same experimental evidence has also been used to level a somewhat different challenge at the common-sense view, arguing that the overarching aim of reasoning is not to deliver better or more reason-governed decisions for individual reasoners, but to improve group decision making or to protect an individual’s sense of self. This paper explores the range of challenges that experimental work has been taken to raise for the common-sense approach and suggests some potential responses. Overall, I argue that the experimental evidence surveyed should not lead us to a rejection of individual rationality. (shrink)

In a world of partially overlapping and partially conflicting interests there is good reason to doubt that self-seeking behaviour at the micro-level will spontaneously lead to desirable social outcomes at the macro-level. Nevertheless, some sophisticated economic writers advocating a laissez-faire policy prescription have proposed various 'invisible hand' mechanisms which can supposedly be relied upon to 'educe good from ill'. Smith defended the 'simple system of natural liberty' as giving the greatest scope to the unfolding of God's will and the working (...) out of 'natural' providential processes free of interference by 'artificial' state intervention - the expression not of divine order but of fallible human reason. Hayek, adopting a similar policy stance, based it in an evolutionary process in which those institutional forms best adapted to reconciling individual interests would, he believed, spontaneously be selected for in the inter-group struggle for survival. Keynes shares the holistic approach of Smith and Hayek, but without their reliance on invisible hand mechanisms. If spontaneous processes cannot be relied upon to generate desirable social outcomes then we have to take responsibility for achieving this ourselves by establishing the appropriate institutional framework. Keynes takes a historical view of the role of capitalism and analyses its pathology as rooted in what we would now refer to as a multi-player prisoners' dilemma. The paper draws out the significance of his methodological standpoint here. Keynes's policy standpoint assigns a critical role to his own class, the 'educated bourgeoisie' in the reform process he maps out. A distinction, but also an intimate connection, is highlighted between, on the one hand, micro-level individualism (the 'Manchester System, and, on the other, the macro-level collective action ('planning') required to preserve it. Finally Keynes is considered in relation to the themes of laissez-faire, holism, reductionism, providentialism and the invisible hand. (shrink)

This paper forms part of a research project investigating conceptions of the relationship between micro-level self-seeking agent behaviour and the desirability or otherwise of the resulting macro-level social outcomes in the history of economics. I identify two kinds of conservative rhetorical strategy, characterised by reductionism, and by holism plus an invisible hand mechanism, respectively. The present paper extends this study to Malthus, focusing on the various editions of his Essay on Population and his Summary View of the Principle of Population. (...) Like the reductionist (Friedman, Lucas) and holistic (Smith, Hayek) proponents of laissez-faire, Malthus, too, is a defender of ‘the present order of things’ and an advocate of dependence on spontaneous forces. Malthus starts out within the eighteenth-century providentialist paradigm epitomised by Adam Smith and Dugald Stewart, but he later abandoned providentialism, adopting a more reductionist standpoint. Like Smith and Stewart, he takes a conservative political stance and opposes radical reform of society. But in taking up the arguments of the leading reformers of the day, Godwin and Condorcet, he is drawn by the logic of his argument to a position very far removed from Smith’s stoic optimism. The weapon he deploys against the reformers is the principle of population, by means of which he is able to portray the present state of society as something natural, eternal and inevitable, something in common with the animal and vegetable kingdoms. Though a potent weapon against the utopians, at the same time the principle of population undermines providentialism In the First Essay he tries to mitigate this by presenting a theodicy to reconcile his theory with a version of providentialism, but within weeks of publication he begins work on its replacement, a secular and reductionist argument that individual self-interest can guide us to socially desirable outcomes. (shrink)

This thesis argues for the fundamental importance of the opposition between holistic and reductionistic world-views in economics. Both reductionism and holism may nevertheless underpin laissez-faire policy prescriptions. Scrutiny of the nature of the articulation between micro and macro levels in the writings of economists suggests that invisible hand theories play a key role in reconciling reductionist policy prescriptions with a holistic world. An examination of the prisoners' dilemma in game theory and Arrow's impossibility theorem in social choice theory sets the (...) scene. The prisoners' dilemma epitomises the collective irrationality coordination problems lead to. The source of the dilemma is identified as the combination of interdependence in content and independence in form of the decision making process. Arrovian impossibility has been perceived as challenging traditional views of the relationship between micro and macro levels in economics. Conservative arguments against the possibility in principle of a social welfare function are criticised here as depending on an illicit dualism. The thesis then reviews the standpoints of Smith, Hayek and Keynes. For Smith, the social desirability of individual self-seeking activity is ensured by the 'invisible hand' of a god who has moulded us so to behave, that the quantity of happiness in the world is always maximised. Hayek seeks to re-establish the invisible hand in a secular age, replacing the agency of a deity with an evolutionary mechanism. Hayek's evolutionary theory, criticised here as being based on the exploded notion of group selection, cannot underpin the desirability of spontaneous outcomes. I conclude by arguing that Keynes shares the holistic approach of Smith and Hayek, but without their reliance on invisible hand mechanisms. If spontaneous processes cannot be relied upon to generate desirable social outcomes then we have to take responsibility for achieving this ourselves by establishing the appropriate institutional framework to eliminate macroeconomic prisoners' dilemmas. (shrink)

This paper forms part of a research project investigating conceptions of the relationship between micro-level selfseeking agent behaviour and the desirability or otherwise of the resulting macro-level social outcomes in the history of economics.

There is a strong formal analogy between proposition-wise supervenience of collective doxastic rationality on individual doxasticrationality and supervenience of social choice functions on individual choice functions. In light of this analogy, the basis for List and Pettit’s impossibility theorems can fruitfully be compared with the basis for Arrow’s. This helps to explain why List and Pettit can derive no impossibility theorem for set-wise supervenience. However, there are empirical reasons for doubting that set-wise supervenience of collective doxastic (...) class='Hi'>rationality on individual doxastic rationality is necessary; a systematic feedback relationship between the former and some individual behavioral dispositions is probably sufficient to dissolve mysteries about group agency. Group doxastic rationality need not supervene on individual rationality. (shrink)

Much research in the last two decades has demonstrated that human responses deviate from the performance deemed normative according to various models of decision making and rational judgment (e.g., the basic axioms of utility theory). This gap between the normative and the descriptive can be interpreted as indicating systematic irrationalities in human cognition. However, four alternative interpretations preserve the assumption that human behavior and cognition is largely rational. These posit that the gap is due to (1) performance errors, (2) computational (...) limitations, (3) the wrong norm being applied by the experimenter, and (4) a different construal of the task by the subject. In the debates about the viability of these alternative explanations, attention has been focused too narrowly on the modal response. In a series of experiments involving most of the classic tasks in the heuristics and biases literature, we have examined the implications of individual differences in performance for each of the four explanations of the normative/descriptive gap. Performance errors are a minor factor in the gap; computational limitations underlie non-normative responding on several tasks, particularly those that involve some type of cognitive decontextualization. Unexpected patterns of covariance can suggest when the wrong norm is being applied to a task or when an alternative construal of the task should be considered appropriate. Key Words: biases; descriptive models; heuristics; individual differences; normative models; rationality; reasoning. (shrink)

This thesis addresses several questions regarding what rational agents ought to believe and how they ought to act. In the first part I begin by discussing how scientists contemplating several mutually exclusive theories, models or hypotheses can reach a rational decision regarding which one to endorse. In response to a recent argument that they cannot, I employ the tools of social choice theory to offer a ‘possibility result’ for rational theory choice. Then I utilize the tools of judgment aggregation to (...) investigate how scientists from across fields can pool their expertise together. I identify an impossibility result threatening such a procedure and prove a possibility result which requires that some scientists sometimes waive their expertise over some propositions. In the second part I first discuss the existing justifications for a restricted principle of indifference that mandates that two agents whose experiences are subjectively indistinguishable should be indifferent with respect to their identities. I argue that all existing justifications rely on the same mistaken reasoning behind the ‘staying’ strategy in the Monty Hall problem. Secondly, I show this mistake is more widespread and I identify it in arguments purporting to show the failure of two reflection-like principles. In the third part I look at a recent argument that fair policy makers face a dilemma when trying to correct a biased distributive process. I show the dilemma only holds if the correction has to happen in one-shot. Finally, I look at how we ought to design public restrooms so that we reduce the discrimination faced by minority groups. I make the case for opening our public restrooms to all genders. (shrink)

The independence of irrelevant alternatives is a popular and important axiom of decision theory. It states, roughly, that one’s choice from a set of options should not be influenced by the addition or removal of further, unchosen options. In recent debates, a number of authors have given putative counterexamples to it, involving intuitively rational agents who violate IIA. Generally speaking, however, these counterexamples do not tend to move IIA’s proponents. Their strategy tends to be to individuate the options that the (...) agent faces differently, so that the case no longer counts as a violation of IIA. In this paper, we examine whether this strategy succeeds. We argue that the ways of individuating options required to save IIA from the most problematic counterexamples—in particular, cases where agents violate IIA due to nonconsequentialist moral beliefs—do so only at the expense of severely compromising its central function within decision theory. (shrink)

All ordinary decisions involve some risk. If I go outside for a walk, I may trip and injure myself. But if I don’t go for a walk, I slightly increase my chances of cardiovascular disease. Typically, we disregard most small risks. When, for practical purposes, is it appropriate for one to ignore risk? This issue looms large because many activities performed by those in wealthy societies, such as driving a car, in some way risk contributing to climate harms. Are these (...) activities morally appropriate? -/- In this paper, I first summarize and respond to some arguments that purport to show that it is appropriate to ignore or discount very small risks. I argue that because our rationality is bounded, it is impossible for us to include every small risk in our decision-making process, and so we may reasonably use heuristics to guide many decisions. However, contrary to some thinkers, I argue that this does not violate the spirit of expected value theory; it merely shows that we should adopt a so-called "two-level" view. Our use of heuristics allows for the reasonable ignoring of some risks, and this perhaps explains why one might be inclined to think that individual climate-related risks are negligible. However, virtually all greenhouse-gas emitting activities in fact have some climate risk on the negative side of the ledger, and the use of heuristics does not permit the general ignoring of climate-change-related risk by individuals on grounds of expediency of judgment and decision-making. (shrink)

This book brings together the most important theoretical work of James S. Coleman on problems of collective action. Coleman's work has formed a consistent and highly distinguished attempt to find an account of the workings of social and political processes rooted in the rationality of the individual participants. The chapters address in various ways the fundamental Hobbesian problem of order; the question of how a set of self-interested individuals can arrive at some kind of social order. The volume (...) is organised in three parts. The essays in Part I address the problem of social choice as a fundamental problem of the functioning of social systems. Those in Part II deal with relations of power as a crucial aspect of the relations between individual actions and their social consequences. Part III considers the question of the creation of collectivities and the rights that are allocated under them. As a whole, the volume demonstrates the integration and force of the views Coleman has developed. (shrink)

This article evaluates alternative models for explaining human behavior. In particular, it compares the resourceful, evaluative, maximizing model (REMM) with the economic (or money maximizing) model of human behavior. The theoretical framework is developed to enhance our understanding of "individual value creation" and to seek an economically rational explanation to: Why Warren Buffett is giving his money away to charity? The article develops a framework of biological, material, and immaterial sources of value. The article additionally extends the existing REMM (...) and finds several economically rational reasons for him to give away his money including the present value of help and goodwill, gained control, and lowered transaction costs. (shrink)

Growing out of a conference on Expectations Formation and Economic Disequilibrium held in New York City in 1981, the papers in this volume provide a complex view of market processes in which individual rationality is no guarantee of convergence to the 'correct' model and the equilibrium coordination of agents' plans. They reject the 'optimality' argument for the rational expectations hypothesis, opening the door to other hypotheses of optimal expectations of agents in the decentralized market economy.

Topics in Cognitive Science, Volume 14, Issue 3, Page 550-573, July 2022.

Individual differences are indeed an important aid to our understanding of human cognition, but the importance of the rationality debate is open to question. An understanding of the process involved, and how and why differences occur, is fundamental to our understanding of human reasoning and decision making.

The topic of this paper is the foundation for individual rights proposed by David Gauthier in his seminal 1986 book Morals by Agreement, and particularly the role of conception of rationality in this foundation. The foundation of rights is a part of Gauthier’s broader enterprise: to ground morals in rationality – more specifically, in the economic conception of rationality. Because of the importance of this conception for the whole of Gauthier’s project, we reconstruct first the conception (...) of rationality which can be found in decision theory and game theory, presenting simultaneously in a relatively non-technical way some basic concepts of the aforementioned disciplines. We proceed then to reconstruction of the foundation of rights itself – it turns on Gauthier’s interpretation of the so-called “Lockean proviso.” Lastly, we turn to the connection between rationality and foundation of rights. It is to be found in the narrow compliance – the disposition to enter only into cooperation which satisfies conditions of fairness set out in part by the Lockean proviso. (shrink)

Regardless of the clarity of the patterns they produce, individual differences in reasoning cannot validate norms of rationality. With improved reliability, these correlations will simply reveal which sorts of biases go together and which predict the intelligence of the decision maker. It seems necessary, therefore, to continue efforts to define rational thought independently of intelligence.

When should we judge that a person is leading or has led a happy life? By what standard? What legitimate criticism can be brought to bear on individual ideals? ;I argue that we have three conceptions of longterm happiness: the contentment conception , the affirmation conception , and the justified affirmation conception . The relation between them is one of inclusion. All three have been proposed as ideals: as candidates for . Evaluative happiness is a comprehensive good, i.e., sufficient (...) for realizing the good life. ;The happy life is one in which a person is disposed to affirm his or her life justifiaby. So the best standard of justification, consistent with our concept of a person and affirmation, will provide the best account of evaluative happiness. ;To affirm one's life is to judge that it is good: that one's important desires are satisfied and successful , and to be satisfied as a consequence. The capacity for affirmation is necessary for personhood, i.e., every person holds some individual ideal. ;Contentment is possible without affirmation. So the contentment conception is inadequate as a conception of evaluative happiness. ;Coherence is a minimal requirement for any adequate standard of justification. Affirmation is consistent with incoherence. So the affirmation conception is not defensible. ;Rationality is necessary for realizing the good life. The subjectivist standard of justification is too strong and/or too weak . Subjectivism is thus discredited. ;I argue for an account of happiness as rational affirmation. This standard is neither subjective nor objective . There are some things one has reason to value if one values anything: the goods of rational affirmation. Every person holds some individual ideal. So every person has reason to value the goods of rational affirmation. ;'Radical objectivism' is incoherent: there could be no good objective standard of justification. What is important is what is important to persons. (shrink)

We propose a rational method for addressing an important question—who deserves to be an author of a scientific article? We review various contentious issues associated with this question and recommend that the scientific community should view authorship in terms of contributions and responsibilities, rather than credits. We propose a new paradigm that conceptually divides a scientific article into four basic elements: ideas, work, writing, and stewardship. We employ these four fundamental elements to modify the well-known International Committee of Medical Journal (...) Editors (ICMJE) authorship guidelines. The modified ICMJE guidelines are then used as the basis to develop an approach to quantify individual contributions and responsibilities in multi-author articles. The outcome of the approach is an authorship matrix, which can be used to answer several nagging questions related to authorship. (shrink)

The economic crisis is also a crisis for economic theory. Most analyses of the evolution of the crisis invoke three themes, contagion, networks and trust, yet none of these play a major role in standard macroeconomic models. What is needed is a theory in which these aspects are central. The direct interaction between individuals, firms and banks does not simply produce imperfections in the functioning of the economy but is the very basis of the functioning of a modern economy. This (...) book suggests a way of analysing the economy which takes this point of view. The economy should be considered as a complex adaptive system in which the agents constantly react to, influence and are influenced by, the other individuals in the economy. In such systems which are familiar from statistical physics and biology for example, the behaviour of the aggregate cannot be deduced from the behaviour of the average, or "representative" individual. Just as the organised activity of an ants’ nest cannot be understood from the behaviour of a "representative ant" so macroeconomic phenomena should not be assimilated to those associated with the "representative agent". This book provides examples where this can clearly be seen. The examples range from Schelling’s model of segregation, to contributions to public goods, the evolution of buyer seller relations in fish markets, to financial models based on the foraging behaviour of ants. The message of the book is that coordination rather than efficiency is the central problem in economics. How do the myriads of individual choices and decisions come to be coordinated? How does the economy or a market, "self organise" and how does this sometimes result in major upheavals, or to use the phrase from physics, "phase transitions"? The sort of system described in this book is not in equilibrium in the standard sense, it is constantly changing and moving from state to state and its very structure is always being modified. The economy is not a ship sailing on a well-defined trajectory which occasionally gets knocked off course. It is more like the slime described in the book "emergence", constantly reorganising itself so as to slide collectively in directions which are neither understood nor necessarily desired by its components. (shrink)

I discuss an aspect of individual differences which has not been considered adequately in the target article, despite its potential role in the rationality debate. Besides having different intellectual abilities, different individuals may produce different erroneous responses to the same problem. In deductive reasoning, different response patterns contradict deterministic views of deductive inferences. In decision-making, variations in nonoptimal choice may explain successful collective actions.

The first goal of this study was to validate the Rational-Experiential Inventory (REI) and the Cognitive Reflection Test (CRT) through checking their relation to the transitivity axiom. The second goal was to test the relation between decision strategies and cognitive style as well as the relation between decision strategies and the transitivity of preferences. The following characteristics of strategies were investigated: requirements for trade-offs, maximization vs. satisficing and option-wise vs. attribute-wise information processing. Respondents were given choices between two multi-attribute options. (...) The options were designed so that the choice indicated which strategy was applied. Both the REI-R and the CRT were found to be good predictors of the transitivity of preferences. Respondents who applied compensatory strategies and the maximization criterion scored highly on the REI-R and in the CRT, whereas those who applied the satisficing rule scored highly on the REI-R but not in the CRT. Attribute-wise information processing was related to low scores in both measurements. Option-wise information processing led to a high transitivity of preferences. (shrink)

_ Source: _Volume 9, Issue 2, pp 177 - 204 This article presents a synoptic account of the faculties of rational soul in the philosophy of Proclus and an interpretation of the unity which this soul constitutes despite the plurality of its faculties and objects of its attentions. It seeks to demonstrate that Proclus, through his conceptual construction of a rational soul grounded in an objective and cosmic framework, accounts for at least some of the subjective aspects of selfhood which (...) many contemporary philosophical theories take to be necessary for a concept of self, but that he does so on his own terms. This means, among other things, that Proclus posits each rational soul as a subjective entity with its own perspective on the world, but a perspective which is always grounded, more or less, in an objective knowledge of the world which belongs to it essentially and eternally. Despite grounding the subjective in the objective, Proclus is able to account for the individuality and uniqueness of souls within the limits of his objective framework. (shrink)

The generation of value bubbles is an inherently psychological and social process, where information sharing and individual decisions can affect representations of value. Bubbles occur in many domains, from the stock market, to the runway, to the laboratories of science. Here we seek to understand how psychological and social processes lead representations (i.e., expectations) of value to become divorced from the inherent value, using asset bubbles as an example. We hypothesize that simple asset group switching rules can give rise (...) to aggregate behavior that resembles the irrational exuberance that can drive asset bubbles. Using an agent-based model we explore whether a simple switching rule can generate irrational exuberance, and systematically explore how communication between decision makers influences the speed and intensity of overvaluation. We show that rational and simple individual level rules combined with honest information sharing are sufficient to generate the collective overvaluation characteristic of irrational exuberance. Further, our results demonstrate that low fidelity in the exchange of value information leads to rapidly increasing expectations about value, even when no one is engaged in exaggerating their expectations for the assets they own. (shrink)

Predictable polarization is everywhere: we can often predict how people’s opinions, including our own, will shift over time. Extant theories either neglect the fact that we can predict our own polarization, or explain it through irrational mechanisms. They needn’t. Empirical studies suggest that polarization is predictable when evidence is ambiguous, that is, when the rational response is not obvious. I show how Bayesians should model such ambiguity and then prove that—assuming rational updates are those which obey the value of evidence—ambiguity (...) is necessary and sufficient for the rationality of predictable polarization. The main theoretical result is that there can be a series of such updates, each of which is individually expected to make you more accurate, but which together will predictably polarize you. Polarization results from asymmetric increases in accuracy. This mechanism is not only theoretically possible, but empirically plausible. I argue that cognitive search—searching a cognitively accessible space for a particular item—often yields asymmetrically ambiguous evidence, I present an experiment supporting its polarizing effects, and I use simulations to show how it can explain two of the core causes of polarization: confirmation bias and the group polarization effect. (shrink)

It is valuable for inquiry to have researchers who are committed advocates of their own theories. However, in light of pervasive disagreement, such a commitment is not well explained by the idea that researchers believe their theories. Instead, this commitment, the rational attitude to take toward one’s favored theory during the course of inquiry, is what I call endorsement. Endorsement is a doxastic attitude, but one which is governed by a different type of epistemic rationality. This inclusive epistemic (...) class='Hi'>rationality is sensitive to reasons beyond those to think the particular proposition in question is true. Instead, it includes extrinsic epistemic reasons, which concern the health of inquiry more generally. Such extrinsic reasons include the distribution of cognitive labor that a researcher will contribute to by endorsing a particular theory. Recognizing endorsement and inclusive epistemic rationality thus allows us to smooth a tension between individual rationality and collective rationality. It does so by showing how it can be epistemically rational to endorse a theory on the basis of the way this endorsement will benefit collective inquiry. I provide a decision theoretic treatment for inclusive epistemic rationality and endorsement which illustrates how this can be accomplished. (shrink)

Abstract The article sketches a theoretical model which explains how it is possible that fundamentalist beliefs can emerge as a result of an individual rational adaptation to the context of special living conditions. The model is based on the insight that most of our knowledge is acquired by trusting the testimony of some kind of authority. If a social group is characterized by a high degree of mistrust towards the outer society or other groups, then the members of this (...) group will rely solely on the authorities of their own group for their acquisition of knowledge. In this way they can adopt a corpus of beliefs which may seem absurd from an external point of view. However, they may be locked in a “fundamentalist equilibrium” in which particularistic trust, common sense plausibility, epistemic seclusion, social isolation and fundamentalist beliefs are mutually reinforcing - and in which individuals who adopt the “fundamentalist truths” of their group do not behave more irrationally than individuals in an open society who accept the “enlightened” worldview of their culture. (shrink)

Is disability disadvantageous? Although many assume it is paradigmatically so, many disabled individuals disagree. Whom should we trust? On the one hand, pervasive mistrust of already underrepresented groups constitutes a serious epistemic injustice. Yet, on the other, individuals routinely adapt to mistreatment and deprivation and claim to be satisfied. If we take such “adaptive preferences” (APs) at face value, then injustice and oppression may not be recognized or rectified. Thus, we must achieve a balance between taking individuals’ preferences and self-assessment (...) as definitive, and ignoring them entirely. Furthermore, current accounts of APs suffer from an ambiguity: are APs an unreliable guide to individuals’ interests, or to just policy? This chapter argues that we should distinguish between those that are unreliable in the former sense (“well-being APs”), and the latter (“justice APs”). Although all APs are nonautonomous, only well-being APs are irrational. Thus, preferences may be diagnosed as unreliable from the perspective of justice without impugning individuals’ rational capacities. (shrink)