There is one rather annoying subtext that recurs throughout the FAQ: the very casual and carefree use of the words “rational” and “irrational”, with the rather flawed idea that following some axiomatic system (e.g. VNM) and Bayes is “rational” and not doing so is “irrational”. I think this is a dis-service, and, what’s more, fails to look into the effects of intelligence, experience, training and emotion. The Allias paradox scratches the surface, as do various psych experiments. But …
The real question is “why does this or that model differ from human nature?” : this question seems to never be asked overtly, but it does seem to get an implicit answer: because humans are irrational. I don’t like that answer: I doubt that they are irrational per-se, rather, they are reacting to certain learned truths about the environment, and incorporating that into judgments,
So, for example: every day, we are bombarded with advertisers forcing us to make judgments: “if you buy our product, you will benefit in this way.” which is a decision-theoretic decision based on incomplete information. I usually make a different choice: “you can choose to pay attention to this ad, or to ignore it: if you pay attention to this ad, you trade away some of you attention span, in return for something that might be good; but if you ignore it, you sacrifice nothing, but win nothing.” I make this last choice hundreds of times a day. Maybe thousands. I am one big optimized mean green decision machine.
The advertizers have trained us in certain ways: in particular, they have trained us to disbelieve their propositions: they have a bad habit of lying, of over-selling and under-delivering. So when I see offers like “a jar contains red blue and yellow balls...” my knee-jerk reaction is “bullshit, I know that you guys are probably trying to scam me, and I’d be an idiot for picking blue instead of yellow, because I know that most typical salespeople have already removed all the blue marbles from the jar. Only a gullible fool would believe otherwise, so cut it out with that Bayesian prior snow-job. We’re not country bumpkins, you know.”
The above argument, even if made ex-post-facto, is an example of the kind of thinking that humans engage in regularly. Humans make thousands of decisions a day (Should I watch TV now? Should I go to the bathroom? Should I read this? What should I type as the next word of this sentence?) and it seems awfully naive to claim that if any of these decisions don’t follow VNM+Bayes, they are “irrational”. I think its discounting intelligence far more than it should.
There is one rather annoying subtext that recurs throughout the FAQ: the very casual and carefree use of the words “rational” and “irrational”, with the rather flawed idea that following some axiomatic system (e.g. VNM) and Bayes is “rational” and not doing so is “irrational”. I think this is a dis-service, and, what’s more, fails to look into the effects of intelligence, experience, training and emotion. The Allias paradox scratches the surface, as do various psych experiments. But …
The real question is “why does this or that model differ from human nature?” : this question seems to never be asked overtly, but it does seem to get an implicit answer: because humans are irrational. I don’t like that answer: I doubt that they are irrational per-se, rather, they are reacting to certain learned truths about the environment, and incorporating that into judgments,
So, for example: every day, we are bombarded with advertisers forcing us to make judgments: “if you buy our product, you will benefit in this way.” which is a decision-theoretic decision based on incomplete information. I usually make a different choice: “you can choose to pay attention to this ad, or to ignore it: if you pay attention to this ad, you trade away some of you attention span, in return for something that might be good; but if you ignore it, you sacrifice nothing, but win nothing.” I make this last choice hundreds of times a day. Maybe thousands. I am one big optimized mean green decision machine.
The advertizers have trained us in certain ways: in particular, they have trained us to disbelieve their propositions: they have a bad habit of lying, of over-selling and under-delivering. So when I see offers like “a jar contains red blue and yellow balls...” my knee-jerk reaction is “bullshit, I know that you guys are probably trying to scam me, and I’d be an idiot for picking blue instead of yellow, because I know that most typical salespeople have already removed all the blue marbles from the jar. Only a gullible fool would believe otherwise, so cut it out with that Bayesian prior snow-job. We’re not country bumpkins, you know.”
The above argument, even if made ex-post-facto, is an example of the kind of thinking that humans engage in regularly. Humans make thousands of decisions a day (Should I watch TV now? Should I go to the bathroom? Should I read this? What should I type as the next word of this sentence?) and it seems awfully naive to claim that if any of these decisions don’t follow VNM+Bayes, they are “irrational”. I think its discounting intelligence far more than it should.