Saturday, July 14, 2007

We Are Irrational


Quote of the day:
"Just to live in the country is a full-time job. You don't have to do anything. The idle pursuit of making a living is pushed to one side, where it belongs, in favor of living itself, a task of such immediacy, variety, beauty, and excitement that one is powerless to resist its wild embrace."
--E.B. White

Have you noticed how irrational human beings are? The misapprehension of risk I talked about yesterday is one example.

Another is that even when there is repeated, overwhelming evidence against someone’s assumptions, he or she will continue holding on to those assumptions.

This confuses me. People’s opinions and beliefs are intractable--even in the face of careful and balanced research and teaching. We have a tendency to revere our own opinions and beliefs. Ministers encounter this daily.

Cultural critic Louis Menand has some marvelously refreshing comments about this in the July 9/16 New Yorker. He is reviewing Bryan Caplan’s book The Myth of the Rational Voter, but these thoughts are his:

“People exaggerate the risk of loss; they like the status quo and tend to regard it as a norm; they overreact to sensational but unrepresentative information (the shark-attack phenomenon); they will pay extravagantly to punish cheaters, even when there is no benefit to themselves; and they often rank fairness and reciprocity ahead of self-interest.

“Most people, even if you explained to them what the economically rational choice was, would be reluctant to make it, because they value other things--in particular, they want to protect themselves from the downside of change.

“They would rather feel good about themselves than maximize (even legitimately) their profit, and they would rather not have more of something than run the risk, even if the risk is small by actuarial standards, of having significantly less.”

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