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June 3, 1995
[SSJ: 20] Response from Reed on Rational Choice
From: Steven R Reed
Posted Date: 1995-06-03
Professor Rosenbluth (It has become my customary mode of address in this forum): Very glad to hear from you. This should be fun.
1) I agree that there is not GENERAL alternative explanation. There are however quite a few more limited but systematic explanations for specific sets of human behavior. One issue is how much to stress a generalized model versus explaining one thing at a time. I find rational choice an unsatisfactory general model and, though there is no alternative general model, I prefer to deal with more realistic narrower models.
2) People who do not act rationally will lose in the long run. They do not have to think rationally, just act rationally. We are in complete agreement on this one, but differ on how tight the competition is. The costs of irrational behavior are often infintesimal in the short run. Learning takes time, often a lot of time.
3) Whether I belong in the rat choice school or not depends a lot on what one considers the alternative. I am obviously not very close to the touchy-feely culturalists, but I find it hard to call someone who believes that people do not maximize, change their preferences in response to their environment, not only do not calculate their utility but often fail to learn from the most obvious less, and more often learn the wrong than the right answer from their experiences, one who believes such things is not a rational choice theorist in my book.
I might add that my natural tendency is to begin with induction and distrust deduction. I am aware that induction alone is sterile, but so is deduction alone. I am interested in any study that confronts the data, but not in deductions from assumptions that I do not believe in. I think your work, Gary Cox, Masaru Kohno, et al., make rat choice a research program and that is great progress over sterile deduction, but I will bet against most rat choice predictions.
Yoroshiku.
Approved by ssjmod at 04:04 PM