Symposium on “Cognition and Rationality: Part II

The European Journal of the History of Economic Thought, 2018

Experimental psychologists and economists construct an individual or interactive decision situation in the laboratory. They find non-negligible differences between the observed behavior of participants and the theoretically implied behavior. We refer here to the expected utility theory and to strategic equilibrium in non-cooperative game theory. We comment on the question whether rationality, implies these theoretical behaviors and whether the non-negligible differences as above imply that participants in experiments are irrational. We also comment on the relation between rationality and consistency, in particular in situations of uncertainty.

1984

This paper reviews the main research in the' areaof human reasoning and rational thinking to determine if man is either an "innately inefficient thinking machine" or if man's irrationality is "rooted in basic human nature," as Ellis (1976) suggests. The paper focuses on the work of two*English theorists, Mason and Johnson-Laird, and two American psychologists, Tversky and Kahneman. Emphasis-is placed on implications for improving the ability to think and reason in a rational-and logical fashion. A number of-experiments are reviewed, dealinq with decision makinge.problem'solving, psychotherapy, creativity, risk, prediction, generalization, and rational emotivi therapy. Some generalconclusions are drawn, suggesting that lost people tend to think simplistically, to make choices without considering allthe variables and all of the information, and ignore long term goals. (JAC)

arXiv (Cornell University), 2019

Economics and Philosophy, 2002

Bayesian decision theory operates under the fiction that in any decisionmaking situation the agent is simply given the options from which he is to choose. It thereby sets aside some characteristics of the decision-making situation that are pre-analytically of vital concern to the verdict on the agent's eventual decision. In this paper it is shown that and how these characteristics can be accommodated within a still recognizably Bayesian account of rational agency.

Behavioral and Brain Sciences

Human cognition requires coping with a complex and uncertain world. This suggests that dealing with uncertainty may be the central challenge for human reasoning. In Bayesian Rationality we argue that probability theory, the calculus of uncertainty, is the right framework in which to understand everyday reasoning. We also argue that probability theory explains behavior, even on experimental tasks that have been designed to probe people's logical reasoning abilities. Most commentators agree on the centrality of uncertainty; some suggest that there is a residual role for logic in understanding reasoning; and others put forward alternative formalisms for uncertain reasoning, or raise specific technical, methodological, or empirical challenges. In responding to these points, we aim to clarify the scope and limits of probability and logic in cognitive science; explore the meaning of the “rational” explanation of cognition; and re-evaluate the empirical case for Bayesian rationality.

It is a utilitarian rationality that one must have spent the whole wealth on the winning lottery ticket because it maximizes welfare. Obviously, it strikes everyone as an unreasonable recommendation because, given the integrity of the lottery system, we never knew before the drawing what the winning lottery ticket is. The orthodox decision theory, the expected utility theory, has an alternative rationality that maximizes only expected utility, with a corresponding better guidance for action in our daily life filled with uncertainties. In this Thesis, I investigate reasonableness through distinguishing it from rationality. I first present a case of the claustrophobic, bringing out his reasonableness even given his irrationality – his irrational fear of confined area. Although it is an issue in ethics, I then borrow from epistemology to discuss context, especially in what alternatives to a decision are relevant to it. Afterwards, I discuss safety, which entails immunity from error, and interact it with context through the margin for error. This brings out what risk is, in contrast to luck, which I discuss next. Given some competence, the success of an act leaves a residue of luck inversely proportional to one’s competence. Lastly, I will discuss responsibility, in interaction with justification in unfavourable situation. These four Chapters include famous cases from epistemology, the case of the cleverly painted mule, the bank case, the case of fake barn, and the new evil demon. Competence minimizes luck whereas safety minimizes risk, and the present externalist rationality entails justification with success: the degree of justification is determined by how much it contributes to success. Since we shall not always know before an act that it would have outputted the outcome of success, some act is irrational though reasonable. The present treatise thus informs any theory of decision under uncertainty in a philosophical way.

2009

Decision Theory and Rationality Abstract The concept of rationality is a common thread through the human and social sciences-from political science to philosophy, from economics to sociology, from management science to decision analysis. But what counts as rational action and rational behavior? This book explores decision theory as a theory of rationality. Decision theory is the mathematical theory of choice and for many social scientists it makes the concept of rationality mathematically tractable and scientifically legitimate. Yet rationality is a concept with several dimensions and the theory of rationality has different roles to play. It plays an action-guiding role (prescribing what counts as a rational solution of a given decision problem). It plays a normative role (giving us the tools to pass judgment not just on how a decision problem was solved, but also on how it was set up in the first place). And it plays a predictive/explanatory role (telling us how rational agents will behave, or why they did what they did). This controversial but accessible book shows, first, that decision theory cannot play all of these roles simultaneously and, second, that no theory of rationality can play one role without playing the other two. The conclusion is that there is no hope of taking decision theory as a theory of rationality. Book keywords Rationality Decision theory Utility Preference Choice Chapter 1 Decision theory and the dimensions of rationality Abstract This chapter begins by explaining the different explanatory projects underlying the three different dimensions of rationality (action-guiding; normative assessment; and explanatory-predictive). It then introduces the basic elements of decision theory and shows how it can serve as a theory of deliberation. It goes on to explore how, at least ion first appearances, decision theory might be employed in the projects of normative assessment and explanation/prediction. Doing this reveals three basic challenges that decision theory must confront if it is to serve as a theory of rationality. These challenges set the agenda for the main part of the book (Chapters 2 – 4). Chapter 1 keywords Theory of choice Decision-making under risk Decision-making under uncertainty Decision making under certainty Representation theorems Chapter 2 The first challenge: Making sense of utility and preference Abstract This chapter explores how the different dimensions of rationality impose conflicting requirements and constraints upon the central notions of decision theory – the notions of utility and preference. It begins by considering the operational understanding of utility dominant in economics, according to which utility is a measure of preference (as revealed in choice). It goes on to explore different alternatives to the operational understanding. The first alternative is to develop a richer notion of preference (as in Gauthier’s theory of considered preferences). The second alternative is to reject preference as the central notion in decision theory (as in Broome’s analysis of utility in terms of goodness). It turns out that no strategy works for all three of the explanatory projects. Chapter 2 keywords Utility Preference Revealed preference Goodness Chapter 3 The second challenge: Individuating outcomes Abstract Standard presentations of decision theory adopt some version of the invariance principle (that it is irrational to assign different utilities to propositions known to be equivalent). This normative principle raises problems for the idea that decision theory can serve as a theory of motivation. Frederic Schick has responded to this tension by proposing an intensional version of decision theory that allows a single outcome to be understood in different ways (and utilities to be assigned accordingly). This raises problems (such as the failure of the expected utility theorem) that can be dealt with by a more fine-grained way of individuating outcomes (as in Broome’s theory of individuation by justifiers). Again, though, none of these strategies serves all three of the explanatory projects under consideration. Chapter 3 keywords Invariance principle Intensionality Framing effects Substitution axiom (sure-thing principle) Allais paradox Chapter 4 The third challenge: Rationality over time Abstract This chapter explores the challenge of developing decision theory to do justice to the sequential and diachronic nature of decision making. Classical decision theory is governed by a separability principle according to which deliberation at a time is answerable only to the agent’s utility function at that time. This opens the door to forms of sequential inconsistency in which an agent makes a plan and then fails to carry it through in what is often called myopic choice. Decision theorists have proposed a number of ways of dealing with sequential inconsistency. These include models of sophisticated choice, resolute choice, and rational preference change. Each model works for some of the explanatory projects associated with the different dimensions of rationality, but none works for all. Chapter 4 keywords Sequential inconsistency Myopic choice Sophisticated choice Resolute choice Separability principle Substitution axiom (sure-thing principle) Chapter 5 Rationality: Crossing the fault lines? Abstract This chapter explores the relation between the different dimensions of rationality. Previous chapters have argued that decision theory cannot developed in a way that will satisfy the requirements of all three dimensions of rationality. This chapter assess the prospects for taking decision theory to be a theory of rationality in just one of the three dimensions. It evaluates Pettit’s claim that decision theory provides a normative canon of rationality, but not a deliberative calculus of rationality, as well as Kahneman and Tversky’s proposal to use prospect theory as a explanatory-predictive complement to decision theory. The upshot of the chapter is that the three dimensions of rationality cannot be separated out. Chapter 5 keywords Prospect theory Belief-desire law Folk psychology Reasoning heuristics

2018

In this paper, I criticize one of the core assumptions of “value-driven epistemology”: that a cognitive state of knowing is more valuable than the state of having just a true belief. This assumption is criticised in Section 2 mainly on the basis of a traditional view of rationality (rational choice theory), and reliabilism is defended against the argument that it fails to solve the so called “value problem”. As an alternative to the conception of cognitive states prevalent within value-driven epistemology, I defend in Section 3 an inferentialist view of the embeddedness of psychological states in a web of normative statuses, and show how this can lead to a vision of knowledge that lacks the problems identified in the first part of the paper.

2000

Rational analysis is an empirical program of attempting to explain why the cognitive system is adaptive, with respect to its goals and the structure of its environment. We argue that rational analysis has two important implications for philosophical debate concerning rationality. First, rational analysis provides a model for the relationship between formal principles of rationality (such as probability or decision theory) and everyday rationality, in the sense of successful thought and action in daily life. Second, applying the program of rational analysis to research on human reasoning leads to a radical reinterpretation of empirical results which are typically viewed as demonstrating human irrationality.

2009

Almost by definition decision-making is typical human activity, and therefore important psychological subject. The starting point of its classical conception within psychology could be traced back to economy and mathematic, with ideas of human as rational economic being, and conceptualising decision making as choice between two or more alternatives, and as such being a separate event in space and time. Already in fifties Herbert Simon challenged such a view with his concept of bounded rationality, emerging from the joint effect of internal limitations of the human mind, and the structure of external environments in which the mind operates. During the last decades with the shift to the real word situations where decisions are embedded in larger tasks, becoming so part of the study of action, the lost rational human appeared again as efficient creature in the complex environment. Gigerenzer showed how heuristics help in this process.

Rationality and Society, 1996

We receive helpful comments from seminar participants at CIRANO (Montréal) and LAMIA (Paris).

The European Journal of Economics, Law and Politics, 2019

Every day people are faced with decisions because of the various issues that are inevitable in day-to-day life. In the same breath, during the choices, there is numerous information on a given phenomenon; information that cannot be comprehended in full and used in making the decisions. This paper seeks to look at the limitations of the market and how they have influences on the different choices that humans make. Moreover, the first part of the paper will address behaviour science and the concept of bounded rationality. The next phase will offer a theoretical glimpse and by so doing compare rationality theory and the critique offered through bounded rationality. Based on the above understanding the paper will then go into detail and look at different concepts related to the subject matters of this paper. The concepts will be decision making in times of uncertainty and risk, the responses of humans when faced with different alternatives and what shapes the choices and how they are shaped.

2004) The Oxford Handbook of Rationality, 2004

Journal of Applied Logic, 2003

Since Pascal introduced the idea of mathematical probability in the 17th century discussions of uncertainty and "rational" belief have been dogged by philosophical and technical disputes. Furthermore, the last quarter century has seen an explosion of new questions and ideas, stimulated by developments in the computer and cognitive sciences. Competing ideas about probability are often driven by different intuitions about the nature of belief that arise from the needs of different domains (e.g., economics, management theory, engineering, medicine, the life sciences etc). Taking medicine as our focus we develop three lines of argument (historical, practical and cognitive) that suggest that traditional views of probability cannot accommodate all the competing demands and diverse constraints that arise in complex real-world domains. A model of uncertain reasoning based on a form of logical argumentation appears to unify many diverse ideas. The model has precursors in informal discussions of argumentation due to Toulmin, and the notion of logical probability advocated by Keynes, but recent developments in artificial intelligence and cognitive science suggest ways of resolving epistemological and technical issues that they could not address. Crown