Rational Choice Theory Quotes

What is to be done with the millions of facts that bear witness that men, consciously, that is fully understanding their real interests, have left them in the background and have rushed headlong on another path, to meet peril and danger, compelled to this course by nobody and by nothing, but, as it were, simply disliking the beaten track, and have obstinately, wilfully, struck out another difficult, absurd way, seeking it almost in the darkness. So, I suppose, this obstinacy and perversity were pleasanter to them than any advantage... The fact is, gentlemen, it seems there must really exist something that is dearer to almost every man than his greatest advantages, or (not to be illogical) there is a most advantageous advantage (the very one omitted of which we spoke just now) which is more important and more advantageous than all other advantages, for the sake of which a man if necessary is ready to act in opposition to all laws; that is, in opposition to reason, honour, peace, prosperity -- in fact, in opposition to all those excellent and useful things if only he can attain that fundamental, most advantageous advantage which is dearer to him than all. "Yes, but it's advantage all the same," you will retort. But excuse me, I'll make the point clear, and it is not a case of playing upon words. What matters is, that this advantage is remarkable from the very fact that it breaks down all our classifications, and continually shatters every system constructed by lovers of mankind for the benefit of mankind. In fact, it upsets everything... One's own free unfettered choice, one's own caprice, however wild it may be, one's own fancy worked up at times to frenzy -- is that very "most advantageous advantage" which we have overlooked, which comes under no classification and against which all systems and theories are continually being shattered to atoms. And how do these wiseacres know that man wants a normal, a virtuous choice? What has made them conceive that man must want a rationally advantageous choice? What man wants is simply independent choice, whatever that independence may cost and wherever it may lead. And choice, of course, the devil only knows what choice. Of course, this very stupid thing, this caprice of ours, may be in reality, gentlemen, more advantageous for us than anything else on earth, especially in certain cases… for in any circumstances it preserves for us what is most precious and most important -- that is, our personality, our individuality. Some, you see, maintain that this really is the most precious thing for mankind; choice can, of course, if it chooses, be in agreement with reason… It is profitable and sometimes even praiseworthy. But very often, and even most often, choice is utterly and stubbornly opposed to reason ... and ... and ... do you know that that, too, is profitable, sometimes even praiseworthy? I believe in it, I answer for it, for the whole work of man really seems to consist in nothing but proving to himself every minute that he is a man and not a piano-key! …And this being so, can one help being tempted to rejoice that it has not yet come off, and that desire still depends on something we don't know? You will scream at me (that is, if you condescend to do so) that no one is touching my free will, that all they are concerned with is that my will should of itself, of its own free will, coincide with my own normal interests, with the laws of nature and arithmetic. Good heavens, gentlemen, what sort of free will is left when we come to tabulation and arithmetic, when it will all be a case of twice two make four? Twice two makes four without my will. As if free will meant that!

I define game theory as the study of how rational individuals make choices when the better choice among two possibilities, or the best choice among several possibilities, depends on the choices that others will make or are making.

But if all maximizing models are really arguing is that “people will always seek to maximize something,” then they obviously can’t predict anything, which means employing them can hardly be said to make anthropology more scientific. All they really add to analysis is a set of assumptions about human nature. The assumption, most of all, that no one ever does anything primarily out of concern for others; that whatever one does, one is only trying to get something out of it for oneself. In common English, there is a word for this attitude. It’s called “cynicism.” Most of us try to avoid people who take it too much to heart. In economics, apparently, they call it “science.

Existing political philosophies all developed before evolutionary game theory, so they do not take equilibrium selection into account. Socialism pretends that individuals are not selfish sexual competitors, so it ignores equilibria altogether. Conservatism pretends that there is only one possible equilibrium—a nostalgic version of the status quo—that society could play. Libertarianism ignores the possibility of equilibrium selection at the level of rational social discourse, and assumes that decentralized market dynamics will magically lead to equilibria that yield the highest aggregate social benefits. Far from being a scientific front for a particular set of political views, modern evolutionary psychology makes most standard views look simplistic and unimaginitive.

One's own free unfettered choice, one's own caprice, however wild it may be, one's own fancy worked up at times to frenzy -- is that very "most advantageous advantage" which we have overlooked, which comes under no classification and against which all systems and theories are continually being shattered to atoms. And how do these wiseacres know that man wants a normal, a virtuous choice? What has made them conceive that man must want a rationally advantageous choice? What man wants is simply independent choice, whatever that independence may cost and wherever it may lead. And choice, of course, the devil only knows what choice.

Depicting rational economic man as an isolated individual – unaffected by the choices of others – proved highly convenient for modelling the economy, but it was long questioned even from within the discipline. At the end of the nineteenth century, the sociologist and economist Thorstein Veblen berated economic theory for depicting man as a ‘self-contained globule of desire’, while the French polymath Henri Poincaré pointed out that it overlooked ‘people’s tendency to act like sheep’.31 He was right: we are not so different from herds as we might like to imagine. We follow social norms, typically preferring to do what we expect others will do and, especially if filled with fear or doubt, we tend to go with the crowd. One

Economics is also an effective theory, based on the notion of free will plus the assumption that people evaluate their possible alternative courses of action and choose the best. That effective theory is only moderately successful in predicting behavior because, as we all know, decisions are often not rational or are based on a defective analysis of the consequences of the choice. This is why the world is in such a mess.

Economics [...] maximizing models are really arguing is that “people will always seek to maximize something,” [...] All they really add to analysis is a set of assumptions about human nature. The assumption, most of all, that no one ever does anything primarily out of concern for others; that whatever one does, one is only trying to get something out of it for oneself. In common English, there is a word for this attitude. It’s called “cynicism.” Most of us try to avoid people who take it too much to heart. In economics, apparently, they call it “science.

Longino argues that in order to be able to distinguish rationality from irrationality we should take the social group as our basic unit. Science is rational to the extent that it chooses theories from a diverse pool of options reflecting different points of view, and makes its choice via a critical dialogue that reaches consensus without coercion. Diversity in the ideas in the pool is facilitated by diversity in the backgrounds of those participating in the discussion. Epistemology becomes a field that tries to distinguish good community-level procedures from bad ones.

Human agency is far more plastic and heterogeneous than rational choice allows. Rational choice fails to explain human behavior because it does not grapple with the range of possible meanings that motivate human life. In the rush to establish a universal, scientific anthropology, this theory neglects human beings’ distinguishing feature: their ability to embody meanings.

If you're anything like me, you don't make up your mind about important issues by doing original research, pounding over primary sources and coming to your own conclusions; you listen to people who claim to know what they're talking about - "experts" - and try to determine which of them is more credible. You do your best to gauge who's authentically well-informed and unbiased, who has an agenda and what it is - who's a corporate flack, a partisan hack, or a wacko. I believe that global warming is real and anthropogenic not because I've personally studied Antarctic ice core samples or run my own computer climate models, but because all the people who support the theory are climatologists with no evident investment in the issue, and all the people who dismiss it as alarmist claptrap are shills of the petro-chemical industry or just seem to like debunking things, from the Holocaust to the moon landing. We put our trust - our votes, our money, sometimes our lives - in someone else's authority. In other words, most of us decide not what to believe but whom to believe. And I say believe because for most people, such decisions are matters of faith rather than reason.

According to the prevailing notion, to be free means to be free to satisfy one’s preferences. Preferences themselves are beyond rational scrutiny; they express the authentic core of a self whose freedom is realized when there are no encumbrances to its preference-satisfying behavior. Reason is in the service of this freedom, in a purely instrumental way; it is a person’s capacity to calculate the best means to satisfy his ends. About the ends themselves we are to maintain a principled silence, out of respect for the autonomy of the individual. To do otherwise would be to risk lapsing into paternalism. Thus does liberal agnosticism about the human good line up with the market ideal of “choice.” We invoke the latter as a content-free meta-good that bathes every actual choice made in the softly egalitarian, flattering light of autonomy. This mutually reinforcing set of posits about freedom and rationality provides the basic framework for the discipline of economics, and for “liberal theory” in departments of political science. It is all wonderfully consistent, even beautiful. But in surveying contemporary life, it is hard not to notice that this catechism doesn’t describe our situation very well. Especially the bit about our preferences expressing a welling-up of the authentic self. Those preferences have become the object of social engineering, conducted not by government bureaucrats but by mind-bogglingly wealthy corporations armed with big data. To continue to insist that preferences express the sovereign self and are for that reason sacred—unavailable for rational scrutiny—is to put one’s head in the sand. The resolutely individualistic understanding of freedom and rationality we have inherited from the liberal tradition disarms the critical faculties we need most in order to grapple with the large-scale societal pressures we now face.

The system failed not because it was rational, but because rational choice in the face of massive ignorance—whether attributable to folly or deceit—is meaningless. Capitalism depends not on the freedom to choose but on the free flow of information across a low-entropy carrier. Corrupt the carrier with noise, and capitalism collapses. And the great corrupter of any carrier, the great generator of destructive noise, is power. And in this case the powers assembled were immense.

In accepting as two primary texts, Singer's Animal Liberation and Regan's The Case for Animal Rights--texts that valorize rationality--the animal defense movement reiterates a patriarchal disavowal of emotions as having a legitimate role in theory making. The problem is that while on the one hand it articulates positions against animal suffering, on the other hand animal rights theory dispenses with the idea that caring about and emotionally responding to this suffering can be appropriate sources of knowledge. Emotions and theory are related. One does not have to eviscerate theory of emotional content and reflection to present legitimate theory. Nor does the presence of emotional content and reflection eradicate or militate against thinking theoretically. By disavowing emotional responses, two major texts of animal defense close off the intellectual space for recognizing the role of emotions in knowledge and therefore theory making. As the issue of caring about suffering is problematized, difficulties with animal rights per se become apparent. Without a gender analysis, several important issues that accompany a focus on suffering are neglected, to the detriment of the movement. Animal rights theory offers a legitimating language for animal defense without acknowledging the indebtedness of the rights-holder to caring relationships. Nor does it provide models for theoretically engaging with our own emotional responses, since emotions are seen as untrustworthy. Because the animal advocacy movement has failed to incorporate an understanding of caring as a motivation for so many animal defense activists, and because it has not addressed the gendered nature of caring--that it is woman's duty to provide service to others, while it is men's choice--it has not addressed adequately the implications that a disproportionate number of activists are women motivated because they care about animal suffering. Animal rights theory that disowns or ignores emotions mirrors on the theoretical level the gendered emotional responses inherent in a patriarchal society. In this culture, women are supposed to do the emotional work for heterosexual intimate relationships: 'a man will come to expect that a woman's role in his life is to take care of his feelings and alleviate the discomfort involved in feeling.' At the cultural level, this may mean that women are doing the emotional work for the animal defense movement. And this emotional work takes place in the context of our own oppression.

Part of the problem is the extraordinary place that economics currently holds in the social sciences. In many ways it is treated as a kind of master discipline. Just about anyone who runs anything important in America is expected to have some training in economic theory, or at least to be familiar with its basic tenets. As a result, those tenets have come to be treated as received wisdom, as basically beyond question (one knows one is in the presence of received wisdom when, if one challenges some tenet of it, the first reaction is to treat one as simply ignorant—“You obviously have never heard of the Laffer Curve”; “Clearly you need a course in Economics 101”—the theory is seen as so obviously true that no one exposed to it could possibly disagree). What’s more, those branches of social theory that make the greatest claims to “scientific status”—“rational choice theory,” for instance—start from the same assumptions about human psychology that economists do: that human beings are best viewed as self-interested actors calculating how to get the best terms possible out of any situation, the most profit or pleasure or happiness for the least sacrifice or investment—curious, considering experimental psychologists have demonstrated over and over again that these assumptions simply aren’t true.2

Yet because the foundations of our political philosophies and constitutions were elaborated in the seventeenth and eighteenth centuries, there is still a tendency to distinguish sharply between politics and technology, the one supposedly based on rights, the other on knowledge. Much political theory argues that consensus can be achieved through the democratic exercise of those rights. In reality, political consensus is largely shaped by the available technological form of life rather than rational deliberation. But today most technological choices are privately made and are protected from public involvement by property rights and technocratic ideology. What can be done to reverse the tide? The

The assumptions that propagandists are rational, in the sense that they follow their own propaganda theories in their choice of communications, and that the meanings of propagandists' communications may differ for different people reoriented the FCC* analysts from a concept of "content as shared" (Berelson would later say "manifest") to conditions that could explain the motivations of particular communicators and the interests they might serve. The notion of "preparatory propaganda" became an especially useful key for the analysts in their effort to infer the intents of broadcasts with political content. In order to ensure popular support for planned military actions, the Axis leaders had to inform; emotionally arouse, and otherwise prepare their countrymen and women to accept those actions; the FCC analysts discovered that they could learn a great deal about the enemy's intended actions by recognizing such preparatory efforts in the domestic press and broadcasts. They were able to predict several major military and political campaigns and to assess Nazi elites' perceptions of their situation, political changes within the Nazi governing group, and shifts in relations among Axis countries. Among the more outstanding predictions that British analysts were able to make was the date of deployment of German V weapons against Great Britain. The analysts monitored the speeches delivered by Nazi propagandist Joseph Goebbels and inferred from the content of those speeches what had interfered with the weapons' production and when. They then used this information to predict the launch date of the weapons, and their prediction was accurate within a few weeks. *FCC - Federal Communications Commission

In cognitive science, the tendency to give different responses to problems that have surface dissimilarities but that are really formally identical is termed a framing effect. Framing effects are very basic violations of the strictures of rational choice. In the technical literature of decision theory, the stricture that is being violated is called descriptive invariance-the stricture that choices should not change as the result of trivial rewordings of a problem.2 Subjects in framing experiments, when shown differing versions of the same choice situation, overwhelmingly agree that the differences in the problem representations should not affect their choice. If choices flip-flop based on problem characteristics that the subjects themselves view as irrelevant-then the subjects can be said to have no stable, well-ordered preferences at all. If a person's preference reverses based on inconsequential aspects of how the problem is phrased, the person cannot be described as maximizing expected utility. Thus, such failures of descriptive invariance have quite serious implications for our view of whether or not people are rational.

The choice today is revolt. Igor Stravinsky wrote, “The old original sin was one of knowledge, the new original sin is one of non-acknowledgment.” It is the refusal to acknowledge anything outside the operation of the human will—most especially the good toward which the soul is ordered. The good is what must ultimately inform human justice. Therefore, moral relativism is inimical to justice, as it removes the epistemological ground for knowing the good. As Max Planck, the founder of quantum theory, wrote, “Everything that is relative presupposes the existence of something that is absolute, and is meaningful only when juxtaposed to something absolute.”4 What happens if the absolute is absent? If what is good is relative to something other than itself, then it is not the good but the expression of some other interest that only claims to be the good. Claims of “good” then become transparent masks for self-interest. This is the surest path back to barbarism and the brutal doctrine of “right is the rule of the stronger”. The regression is not accidental. Relativism inevitably concludes in nihilism, and the ultimate expression of nihilism is the supremacy of the will.

the behavior that arises from it, is the science of psychology. Economics is also an effective theory, based on the notion of free will plus the assumption that people evaluate their possible alternative courses of action and choose the best. That effective theory is only moderately successful in predicting behavior because, as we all know, decisions are often not rational or are based on a defective analysis of the consequences of the choice. That is why the world is in such a mess. The third question addresses the issue of whether the laws that

there is good reason to believe that rational choice theory permits greater perspicacity when it comes to articulating the structure of decision in nonsocial contexts, but that it fails to offer comparable illumination when it comes to analyzing social interaction. Indeed, many of the arguments that have been used to immunize rational choice theory against the sort of anomalies detected by experimental game theorists have the effect of obscuring, rather than elucidating, the intentional structure of social interactions.

First, deontological systems are systems that are based on principles in which actions (or character, or even intentions) are inherently right or wrong. There are three primary deontological systems: (1) divine command theory, (2) natural law, and (3) ethical rationalism. The Christian will tend to be more deontologically oriented

Method 5: Appear Crazy (At Your Own Risk) The normal economic assumption is that people maximize utility or profits. Given a choice of ten cents or no cents, a person would choose ten cents, regardless of what opponents get. Consider the following game, known as the ultimatum game. We will explain this game a bit more in the next section. For now, we cover the basic idea. In the game, there is $1 at stake, and your opponent offers you a take-it or leave-it portion of the dollar. If you accept the split, then you keep your portion, and your opponent gets the rest. If you reject, the $1 is burned and both of you go home with nothing. The game theory solution is that your opponent offers you one cent (or no cents) and you accept. You do not care that you are taken advantage of because, rationally, taking home some money is better than rejecting and taking home nothing. So even if you think a one cent offer is unfair, you do not exact vengeance by rejecting. But let's say you threaten that if you do not get at least 50 cents you will definitely reject

We believe that the more important lesson from the experimental research is that people bring many considerations and preferences into their choices besides their own rewards. This takes us beyond the scope of conventional economic theory. Game theorists should include in their analysis of games the players’ concerns for fairness or altruism. “Behavioral game theory extends rationality rather than abandoning it.”10

A new awareness of the integral role that social networks play in long-distance migration goes beyond traditional ‘rational-choice and decision-making models’ drawn from classical economics that content themselves with explaining migration as the outcome of a ‘cost-benefit analysis of the most favorable destination.’ According to recent theory, something more than the push and pull of differential labor markets, hunger, or the search for religious freedom sends people into long-distance emigration. Voluntary migrations do not depend merely on autonomous individuals weighing the costs and benefits of uprooting themselves. Rather, social networks and relationships bind uprooted people on to another like the links in a chain. ‘Chain migration’ is sustained from within, and indeed ‘can become self-perpetuating,’ as ‘each act of migration itself creates the social structure needed to sustain’ further migration. News of another’s good fortune in a distance place, information about unforeseen opportunities, invitations to follow in another’s migratory footsteps, or a familial obligation to do so—the long reach of social relations such as these are the incentive that draws people into exile in other lands and accounts for the enormous scale of some systems of international migration.

Thaler conducted experiments cataloguing decision anomalies. His work demonstrated psychological influences on decisions that would not exist if humans were completely rational. These sorts of experiments fundamentally undermined the rationality assumption on which so many economic theories were based.

The main principles of this “rational choice theory” are that we have coherent and stable preferences, we consider the full range of information relevant to a decision, and we use that information to calculate the option that best fulfills our preferences.

When Gary Becker, an American economist, in his celebrated `Treatise of Family’ imagined a household as a primary site of production of goods and sustenance in the form of child care, meals, and shelter, besides a range of commodities such as health, happiness, self-esteem, security, sexual pleasure, and so on, he disregarded the fact that a family is also a site of reproducing inequalities and sustaining patriarchal values. Becker proposed the theory of a rational `economic man’ who makes choices based on his self-interest, but he has not contemplated the dire situations of exploitation, blackmail, and extortion within marriages in South Asian patriarchal, hierarchical societies where self-interest would turn into insatiable greediness to create an antagonistic situation where an `economic man’, driven by irrational voracity, ends up torturing and murdering `his wife’, and destroying his own family when his arbitrary demands remain unfulfilled

In the course of the 1960s, the left adopted almost wholesale the arguments of the right,” observed Daniel Patrick Moynihan, a domestic policy adviser to all three of the decade’s presidents. “This was not a rude act of usurpation, but rather a symmetrical, almost elegant, process of transfer.” Exaggerating for effect—but not to the point of inaccuracy—Moynihan remembered that by decade’s end, “an advanced student at an elite eastern college could be depended on to avow many of the more striking views of the Liberty League and its equivalents in the hate-Roosevelt era; for example that the growth of federal power was the greatest threat to democracy, that foreign entanglements were the work of demented plutocrats, that government snooping (by the Social Security Administration or the United States Continental Army Command) was destroying freedom, that the largest number of functions should be entrusted to the smallest jurisdictions, and so across the spectrum of this viewpoint.”2 Driven primarily by the expanding war in Vietnam, this new current on the left took up individualistic and anti-statist themes that were once the province of the right. Another part of this convergence was the rise of the economics profession. The new economics appeared a success on its own terms; growth had picked up across the Kennedy years. By 1965, GNP had increased for five straight years. Unemployment was down to 4.9 percent, and would soon drop below the 4 percent goal of full employment. As James Tobin reflected, “economists were riding the crest of a wave of enthusiasm and self-confidence. They seemed, after all, to have some tools of analysis and policy other people didn’t have, and their policy seemed to be working.”3 With institutional economics a vanquished force, most economists accepted the tenets of the neoclassical revolution: individuals making rational choices subject to the incentives created by supply and demand. Approaching policy with an economic lens cut across established political lines, which were often the creation of brokered coalitions, habit, or historical precedent. Economic analysis was at once disruptive, since it failed to honor these accidental accretions, and familiar, since it spoke a market language resonant with business-friendly political culture.4 Amid this ideological confluence, Friedman continued his dour rumblings and warnings. Ignoring the positive trends in basic indicators of economic health, from inflation to unemployment to GDP, he argued fiscal demand management was misguided, warned Bretton Woods was about to collapse, predicted imminent inflation, and castigated the Federal Reserve’s basic approach. Friedman’s quixotic quest—and the media attention it generated—infuriated many of his peers. Friedman, it seemed, was bent on fixing economic theories and institutions that were not broken.

Only love can bring full freedom, all else brings half freedom. What is half freedom you ask? When in the name of freedom you imprison yourself to one side or sect, everything outside that sect seems evil. For example, fundamentalists choose the side of blind faith, and every act of reason seems like blasphemy - just like cold, sharp-tongue intellectuals choose the side of rationality even at the expense of humanity, and everything illogical seems outdated - or wait, I got a better one - so-called social activists often get so attached to their self-imposed identity of victimhood, that every person with a political, corporate, legal or bureaucratic background seems to appear as devil incarnate. This, my friend, is what I call "half freedom", which by the way, is far worse than the lack of freedom. And even though it manifests as an act of willful choice, when you get down to it, it's just plain old rigidity. And if we want to build a truly just, inclusive and progressive society, this hypocritical half-freedom won't do - what's needed is whole freedom - a kind of freedom that liberates the mind of all superstition as well as ignorant suspiciousness. It's time we realize, yelling about justice without using common sense is just as useless as keeping quiet. What this means is that, we gotta come together regardless of our background - the teacher, the scientist, the student, the copper, the politician, the civil servant, the entrepreneur, the economist, the janitor, the construction worker - every single person from every single walk of life must come forward surpassing all suspicious conspiracy, and contribute the best of their capacity in the making of a real civilized world.

... The individual is still obliged to confer the legitimacy of mutually antagonistic values, for even though the array of ultimate values may contract with the rationalization of the world, one is never relieved from the existential burden of choice ('taking a stand').

Subconscious thought is biased toward regularity and structure, and it is limited in formal power. It may not be capable of symbolic manipulation, of careful reasoning through a sequence of steps. Conscious thought is quite different. It is slow and labored. Here is where we slowly ponder decisions, think through alternatives, compare different choices. Conscious thought considers first this approach, then that—comparing, rationalizing, finding explanations. Formal logic, mathematics, decision theory: these are the tools of conscious thought. Both conscious and subconscious modes of thought are powerful and essential aspects of human life. Both can provide insightful leaps and creative moments. And both are subject to errors, misconceptions, and failures.

What are we to do with all these questions? Is Zermelo-Fraenkel set theory consistent or not? Is the continuum hypothesis true or false? Is the axiom of choice acceptable or unacceptable? These questions are independent of Zermelo-Fraenkel set theory, which is a basis of most of mathematics. So we cannot use mathematics to answer these questions. The answers to all of these simply stated questions are beyond contemporary mathematics, beyond rational thought, and perhaps beyond us.

Classical economists assume that people have rational and stable preferences and that their well-being is greatest when they have the maximum opportunities to satisfy them. So more choice is always better, and more income increases choices, so the way to make life better is to increase people’s incomes. This theory is all well and good, but is it in fact true?

Adaptive mate choice proposes that sexual desire always remains under strict control of the ultimately rational need for extrinsically better mates. In a curious anthropomorphic inversion of nature, animal passions are now seen as being more rational than our own.

The full treatment of the formal theory of how to make decisions in risky situations—called expected utility theory—was published in 1944 by the mathematician John von Neumann and the economist Oskar Morgenstern. John von Neumann, one of the greatest mathematicians of the twentieth century, was a contemporary of Albert Einstein at the Institute of Advanced Study at Princeton University, and during World War II he decided to devote himself to practical problems. The result was the 600-plus-page opus The Theory of Games and Economic Behavior, in which the development of expected utility theory was just a sideline. The way that von Neumann and Morgenstern created the theory was to begin by writing down a series of axioms of rational choice. They then derived how someone who wanted to follow these axioms would behave. The axioms are mostly uncontroversial notions such as transitivity, a technical term that says if you prefer A over B and B over C then you must prefer A over C. Remarkably, von Neumann and Morgenstern proved that if you want to satisfy these axioms (and you do), then you must make decisions according to their theory. The argument is completely convincing. If I had an important decision to make—whether to refinance my mortgage or invest in a new business—I would aim to make the decision in accordance with expected utility theory, just as I would use the Pythagorean theorem to estimate the altitude of our railroad triangle. Expected utility is the right way to make decisions.

Religion in (the US) is so focused on fighting science and these compelling atheist voices that your preachers have lost track of what religion is really about. In... - the Eastern Church - and in Eastern religions like Buddhism and Hinduism, religion isn't there to offer theories or explanation. We accept that the divine is unknowable.....for a lot of rational people..., it's become a choice. Fact or faith. Science or religion....You shouldn't have to choose.

The path from knowledge, as a general form of domination, to administrative power might seem more circuitous. Does the kind of esoteric knowledge we encounter at Chavín, often founded in hallucinogenic experience, really have anything in common with the accounting methods of the later Inca? It seems highly unlikely – until, that is, we recall that even in much more recent times, qualifications to enter bureaucracies are typically based on some form of knowledge that has virtually nothing to do with actual administration. It’s only important because it’s obscure. Hence in tenth-century China or eighteenth-century Germany, aspiring civil servants had to pass exams on proficiency in literary classics, written in archaic or even dead languages, just as today they will have had to pass exams on rational choice theory or the philosophy of Jacques Derrida. The arts of administration are really only learned later on and through more traditional means: by practice, apprenticeship or informal mentoring.

In the experienced world, things come and go incessantly and some come and go so fast that we can never know why; causal models fit only sombunall of experience. There is a sense of flow, process, evolution, growth, and of what Bergson called "the perpetual upsurge of novelty." In this experienced world, and not in abstract theory, we are faced by apparent decisions continually. We make them and we experience the sense of choice as we do so. We can never know how much such choice is "real" absolutely, but since we can never know anything else absolutely, we make do on probabilities.

A popular misconception is that decision analysis is unemotional, dehumanizing, and obsessive because it uses numbers and arithmetic in order to guide important life decisions. Isn’t this turning over important human decisions “to a machine,” sometimes literally a computer — which now picks our quarterbacks, our chief executive officers, and even our lovers? Aren’t the “mathematicizers” of life, who admittedly have done well in the basic sciences, moving into a context where such uses of numbers are irrelevant and irreverent? Don’t we suffer enough from the tyranny of numbers when our opportunities in life are controlled by numerical scores on aptitude tests and numbers entered on rating forms by interviewers and supervisors? In short, isn’t the human spirit better expressed by intuitive choices than by analytic number crunching? Our answer to all these concerns is an unqualified “no.” There is absolutely nothing in the von Neumann and Morgenstern theory — or in this book — that requires the adoption of “inhumanly” stable or easily accessed values. In fact, the whole idea of utility is that it provides a measure of what is truly personally important to individuals reaching decisions. As presented here, the aim of analyzing expected utility is to help us achieve what is really important to us. As James March (1978) points out, one goal in life may be to discover what our values are. That goal might require action that is playful, or even arbitrary. Does such action violate the dictates of either rationality or expected utility theory? No. Upon examination, an individual valuing such an approach will be found to have a utility associated with the existential experimentation that follows from it. All that the decision analyst does is help to make this value explicit so that the individual can understand it and incorporate it into action in a noncontradictory manner.

As is often noted, and only partially in jest, economists seek to explain why people choose to commit suicide, while sociologists explain why they have no such choice. On suicide, the sociologists have been rather more successful than the economists. For their part, economists have proposed a “rational” theory of suicide that posits that people kill themselves in order to “maximize utility.

The theory developed in this book is a rationalist, strategic choice theory. It takes the perspective of a state that faces an international environment that presents constraints and opportunities.

Consequently we have only to discover these laws of nature, and man will no longer have to answer for his actions and life will become exceedingly easy for him. All human actions will then, of course, be tabulated according to these laws, mathematically, like tables of logarithms up to 108,000, and entered in an index; or, better still, there would be published certain edifying works of the nature of encyclopaedic lexicons, in which everything will be so clearly calculated and explained that there will be no more incidents or adventures in the world. en—this is all what you say—new economic relations will be established, all ready-made and worked out with mathematical exactitude, so that every possible question will vanish in the twinkling of an eye, simply because every possible answer to it will be provided. en the ‘Palace of Crystal’ will be built. en ... In fact, those will be halcyon days. Of course there is no guaranteeing (this is my comment) that it will not be, for instance, frightfully dull then (for what will one have to do when everything will be calculated and tabulated), but on the other hand everything will be extraordinarily rational. Of course boredom may lead you to anything. It is boredom sets one sticking golden pins into people, but all that would not matter. What is bad (this is my comment again) is that I dare say people will be thankful for the gold pins then. Man is stupid, you know, phenomenally stupid; or rather he is not at all stupid, but he is so ungrateful that you could not find another like him in all creation. I, for instance, would not be in the least surprised if all of a sudden, A PROPOS of nothing, in the midst of general prosperity a gentleman with an ignoble, or rather with a reactionary and ironical, countenance were to arise and, putting his arms akimbo, say to us all: ‘I say, gentle- man, hadn’t we better kick over the whole show and scatter rationalism to the winds, simply to send these logarithms to the devil, and to enable us to live once more at our own sweet foolish will!’ at again would not matter, but what is annoying is that he would be sure to find followers—such is the nature of man. And all that for the most foolish reason, which, one would think, was hardly worth mentioning: that is, that man everywhere and at all times, whoever he may be, has preferred to act as he chose and not in the least as his reason and advantage dictated. And one may choose what is contrary to one’s own interests, and sometimes one POSITIVELY OUGHT (that is my idea). One’s own free unfettered choice, one’s own caprice, however wild it may be, one’s own fancy worked up at times to frenzy—is that very ‘most advantageous advantage’ which we have overlooked, which comes under no classification and against which all systems and theories are continually being shattered to atoms. And how do these wiseacres know that man wants a normal, a virtuous choice? What has made them conceive that man must want a rationally advantageous choice? What man wants is simply INDEPENDENT choice, whatever that independence may cost and wherever it may lead. And choice, of course, the devil only knows what choice.

But there's a bigger lesson that I would like to draw from this experiment—and in fact from all that I have said in the preceding chapters. Standard economics assumes that we are rational—that we know all the pertinent information about our decisions, that we can calculate the value of the different options we face, and that we are cognitively unhindered in weighing the ramifications of each potential choice. The result is that we are presumed to be making logical and sensible decisions. And even if we make a wrong decision from time to time, the standard economics perspective suggests that we will quickly learn from our mistakes either on our own or with the help of “market forces.” On the basis of these assumptions, economists draw far-reaching conclusions about everything from shopping trends to law to public policy. But, as the results presented in this book (and others) show, we are all far less rational in our decision making than standard economic theory assumes. Our irrational behaviors are neither random nor senseless—they are systematic and predictable. We all make the same types of mistakes over and over, because of the basic wiring of our brains. So wouldn't it make sense to modify standard economics and move away from naive psychology, which often fails the tests of reason, introspection, and—most important—empirical scrutiny? Wouldn't economics make a lot more sense if it were based on how people actually behave, instead of how they should behave? As I said in the Introduction, that simple idea is the basis of behavioral economics, an emerging field focused on the (quite intuitive) idea that people do not always behave rationally and that they often make mistakes in their decisions.