To the lay person, yes.
This is really shocking. Intentional obfuscation and wrong usage are better for the layperson because it makes understanding easier?
Not shocking, disgusting.
Gadarene:
But only if the binary relation over your preferences is complete, transitive (or quasi-transitive), and acyclic.
But economic rationality isn’t a lay term.
Although I do agree with Trunk that Funk is using the term in a correct way.
Ok, let’s hear it, then.
What’s this definition of “rationality” that will demonstrate how Dr. Funk was misusing it?
Besides, if “rational” in an economic sense doesn’t mean “logical”, just who is obfuscating it?
Maegs:
Well, duh.
I’m not sure what the horrendous cost associated with voting is that I ought to be dissauded. It took me 1 minute to fill out my voter registration card and check the “Permanent Absentee” box, and another few minutes and a stamp every year or two.
Yeah, my vote is unlikely to change the outcome of the election, but the sense of civic pride and the chance of effecting real change is easily worth five minutes of my time and $0.37 a year.
I agree completely with Walrus. Of course, everyone who disagrees with me is welcome to stay home, since your votes won’t count anyway 
The words “unlikely” and “chance” understate it terrifically, I think.
Well, he’s right. There isn’t a “tremendous cost” associated with voting. It’s just that there isn’t a “tremendous benefit” to off-set the minimal cost. At least, that’s how I think the article presents it.
The good feeling Walrus gets from voting is enough to off-set his cost (5 minutes and $.37).
For me, the good feeling I get isn’t off-set by the hassle of voting. . .driving somewhere, standing in line, missing exercise, missing work, etc.
The interesting aspect of the article was that someone like me SHOULD have voted when those “costs” were removed from voting. But what happened was the opposite.
Here’s the big disconnect, Trunk. When we talk about rationality in the usual sense, it refers to outcomes. We tend to think that good outcomes are rational and bad outcomes are irrational. The idea of rationality acquires normative force: we believe that people ought to behave rationally.
In economics, rationality is divorced almost entirely from outcomes. Rationality describes two things.
**People are goal directed. Their actions are not random.
People order their preferences in a certain way.**
That’s it. It may be rational for one person to scrimp and save but rational for another to blow his inheritance on dope and hookers. It may be rational for one person to pay a high cost for voting with a vanishing probability of influencing the election and rational for another person not to vote at all. All of these outcomes can be rational given the shape of the ordering of a person’s preferences. Economics does not typically comment on these orderings in a normative way nor do economics spill much ink theorizing about preference formation. That’s what psychologists and philosophers do.
The rules of preference ordering are important to economics. To say that one’s preference ordering is “rational”, some conditions typically have to be true. Suppose you have a relation between two preferences called “As Least As Good As.” Its meaning is pretty self-explanatory. There are two outcomes in your preference set over car manufacturers, “Ford” and “Chevy.” You want to compare them. You might say, “Ford is At Least As Good As Chevy.”
First, your preference set has to be complete. Your set has to contain all available alternatives and you must be able to make meaningful comparisons between all alternatives. When comparing outcomes over cars, it makes no sense to say, “Ford is At Least As Good As Boeing.” Boeing cannot be in your set of preferences over cars.
Your preference set has to be transitive. If Ford Is At Least As Good As Chevy and Chevy Is At Least As Good As Dodge, then Ford Is At Least As Good As Dodge.
Your preference set has to be acyclic. If Ford Is Preferred To Chevy And Chevy Is Preferred To Dodge and Dodge is Preferred To Nissan and … Is Preferred To Brand X, then Ford Is At Least As Good As Brand X. You can see why relaxing this condition means that the person’s preferences are pretty nonsensical.
These are not stringent requirements on individual rationality. They are far less restrictive than our usual normative ideas about reason and good outcomes. You don’t have to be particularly “smart” to be rational. These conditions define logic that is hardwired into most people’s brains. It is so obvious that most people don’t even bother to think about it.
What Funk must have meant to say is, “rational people who pay high costs to vote, receive little ‘ego rent’ from voting, and have a vanishingly small probability of influencing the election in a pivotal way do not vote.”
In other words, you don’t vote if you don’t care or if you need to sacrifice an hour of paid labor to do it. This is not an earth-shattering conclusion. But the fact that some person somewhere does vote does not mean that he is irrational.
Sorry this was long-winded, but I hope that it helps.
Yes, it does. Thanks.
No, really? You don’t say. This is one of the (many) things that cause John Q Public to not pay any attention whatsoever to economists any more, because the difference between specific usage of words and general usage is horribly large.
Not having read the book I’m not aware of the specific argument, but in the case **Trunk **mentions, if the opportunity cost of voting is altered with no change to people’s (non)voting behaviour, does that not suggest that either the preference set being measured is incomplete, or that people’s voting decisions are non-rational, or both?
Voters? Irrational? Surely not! :eek:
I might also add that one of the authors, Levitt, has a Ph.D in economics from MIT and is currently a professor in the Department of Economics at University of Chicago. Believe me, the guy knows what “rational” means in every sense of the word.
I’m sure he does, but that doesn’ty mean that his meaning is necessarily clear or unambiguous to the lay reader. Dewey and other Pragmatists presumably knew both their restricted and specialized meanings of “pragmatism”, “proven” and “true”, but that didn’t keep their work and pronouncements from being misunderstood and confusing when their results were applied to and communicated to the Outside World. See Martin Gardner’s book The Whys of a Philosophical Scriverener for details.
I honestly don’t see where the disagreement is anymore, following Maeglin’s detailed post. Maybe I can come at it from a lay perspective (know nothing about economics except what I’ve gleaned from law & economics, which is kinda similar but different): economic rationality does mean, broadly, acting in one’s own self-interest. In that respect voting is ‘irrational’ to the extent that it’s not in your interest to put forth whatever effort/time/cost is required to cast your vote. But what is and is not in one’s self-interest isn’t externally derivable (except, inter alia, in the broad brush fashion detailed by Maeglin) – this is the crucial difference between the lay understanding of rationality (which is then stretched, as Trunk’s definition #3 demonstrates, to meaning ‘sane’ and ‘logical’) and the term-of-art understanding of the concept. If the conditions Maeglin lays out are satisfied, then the preferences one expresses are, presumptively, the result of a rational ordering for that person. In that way it’d be ‘economically rational,’ all else being equal, for me to trade my brand-new Prius for a couple of cereal box tops if I, personally, genuinely valued those box tops more. And it’d be ‘economically rational’ for me to vote, as long as whatever intrinsic pleasure I derived from the act was worth the incurred cost.
Maegs and js_africanus and others, my apologies if I’ve butchered that badly. I’m but a humble law-guy. 
Thank you for illustrating the concept of “rational ignorance.” If the expected utility of studying basic economics is less than the expected cost of acquiring such knowledge, John Q Public won’t bother. No one loses any sleep over that.
For the record, JQP seems to pay quite a bit to economists. When the Chairman of the Federal Reserve scratches his ass, he moves markets all over the world. Economists drive strategic business decisions in global corporations everywhere that affect the lives of billions. So if someone doesn’t want to bother to educate himself, well, c’est la vie.
Or neither. Think about it this way. The decision to vote, simply put, is the probability that your vote will be pivotal (usually vanishingly small) times the utility you derive from the outcome plus your feeling of good citizenship minus the cost of voting.
You are the ith voter. You have preferences over outcomes and you have beliefs about the probability that your vote will be pivotal. Hold all of the voting variables constant except for the cost and see what happens.
Suppose the cost is lowered. You, the voter, expect that since the cost goes down, more people will vote. This decreases the likelihood that your vote will be pivotal, thereby reducing the utility you get from voting. How much the lowered cost and the lowered probability that your vote matters offset each other depends on how the model is specified. The intuition is that there is some ideal cost of voting that maximizes voter turnout and that turnout as a function of cost is parabolic in shape. Costs are too high or too low and no one shows up at all.
This is just a thought experiment and should not be taken as a fully specified model or as an unequivocal statement about reality. An economist would specify this model and test it statistically.
Gadarene:
Maybe so, maybe no. Self-interest is usually exogenously defined: living a long, healthy, prosperous life is considered “good.” Smoking tons of crack might be rational in an economic sense, but not exactly in one’s self-interest. I think you understand this point just fine, I just want to be really clear on terminology.
However, economic rationality does not necessarily mean “doing whatever I want.” Kicking my coworker in the nuts might rank highest in my preference profile over “ways to deal with annoying coworkers,” but that does not necessarily mean it would be rational to choose this outcome. Under most circumstances, it isn’t.
Economic rationality is, in a few words, how you maximize your utility subject to constraints. The constraints that govern this particular decision are pretty evident.
Nailed it in one.
Preferences are private and unobserved. We can deduce them from prior theory, assume them, or browbeat people into revealing them. That is all.
We observe some sort of social choice rule, say, simple majority rule. We observe that people make individual choices to pull the lever for candidate A or candidate B. We observe who wins and by how many votes. Based on what we know about the social choice function and the outcome, we can deduce what properties of the preference set and binary preference relations have to be true, but we can never prove what the underlying preferences actually are.
As always, hope this helps.
Ummm, apart from the fact that JQP is the target audience for all the economic policies pitched by politicians. And if JQP has no clue about economics, and discounts the opinions of talking heads with Economics PhDs because he has no respect for the discipline, he is unlikely to be sufficiently questioning of things like trade and tariff policy, to pick a random example.
Making real economics more approachable and relevant to the man in the street is very important, because otherwise it will be replaced in the public eye by some flavour of voodoo economics.
Yeah, ok, because economic policies pitched by politicians always contain stock economic phrases like “perfect Bayesian equilibrium,” “constrained optimization”, or “strategy functions monotonically increasing with respect to type.”
When was the last time you heard Alan Greenspan justify his position before Congress using a formal model and classical (or Bayesian) hypothesis testing?
Hint: never.
The fact that there exists a technical language of economics that JPQ may not understand does not diminish the impact of the discipline on the everyday lives of regular people or the amount they pay attention to economic forecasts. When was the last time you heard someone distrust doctors because of all those crazy foreign-sounding words?
True, but people generally have a reasonable respect for doctors and accept that they know what they are talking about, even if they don’t necessarily follow their advice on diet and such.
When politicians propose some truly asinine policy measure like the Common Agricultural Policy or it’s US equivalent, economists will cry foul pretty much en masse and be roundly ignored by everyone. I can’t imagine the membership of the AMA being overlooked in such a manner when pronouncing on their area of expertise.
I’m unsure what you mean by “roundly ignored by everyone.” That hasn’t been my experience. Could you explain?