Lecture 9 Flashcards
What is rationality?
- The property of an action of being optimal under a set of constraints
- You ignore all the side effects that have influence on something
What is the difference between the descriptive use of rationality or normative use of rationality?
Descriptive use:
- By modeling the reasoning and decision making of other agents it becomes easier to try understand and predict the behaviour of others
- One group does one thing, so we presume the other group will do the same
Normative use of models of rationality:
- By setting standards for reasoning and decision making it becomes easier to try to evaluate other’s behaviour and to guide our own
- What should people do and how can we guide behaviour?
What is the Rational Choice Theory (RCT)?
- Assumes that the agent chooses the action that provides the maximum benefit (net benefit)
- Basic premise of RCT is that aggregate social behaviour results from the behaviour of individual actors, each of whom is making their own decisions (one does not influence the other)
- Assumes that all action is rational
- Net benefit = benefit - cost
What is Bounded Rationality?
- The idea that rationality is limited when agents make decisions
- The tractability of the decision problem, the cognitive limitations of the mind, and the time available make the decisions
- Satisfactory solution, not always the optimal one
What are the historical roots of RCT?
Philosophy, mathematics, and economics
What are the axioms (characteristics) of RCT?
- There is a set of alternative choices (for example A and B)
- Completeness: the agent prefers A, B, or is indifferent between A and B
- Transitivity: if an agent prefers A to B and B to C, then he prefers A to C
- The agent chooses the alternative that he prefers the most. If he is indifferent than he just chooses one of the alternatives randomly (because it doesn’t matter)
What are comments on RCT?
- RCT speaks about agents’ preferences but it does not say how agents develop these preferences
- RCT plays a dominant role in economics, political science, and other social sciences
- The agent is seen as ideal reasoned
What are the critiques on RCT?
Human action is not as RCT says it is. It is influenced by information, cognitive powers and time. Therefore, RCT does not always lead to the preference that the agent will choose.
What are the roots of Bounded rationality?
- Economics
- Psychology
What is the concept of heuristic?
- Context-dependent rule of thumb for reasoning and decision making (irrational influencer of the choice you are making, based on information that you do have)
- A heuristic is any approach to reasoning and decision making that employs a practical method , not guaranteed to be optimal, perfect, logical, or rational, but instead sufficient for reaching an immediate goal
- Bounded rationality
What different kinds of heuristics are there?
Task: choose between alternatives
- Recognition heuristic: exploits a lack of knowledge (you are likely to choose the option of something you know/recognise)
- Take-the-best heuristic: deliberately ignores information (example is voting in elections, you might not agree with all but first point is the same so you vote for them anyway)
Task: choose whether to intervene:
1. Default heuristic: embodies saving effort
What are critiques on bounded rationality?
- Human decision making might involve more calculation
- Bounded rationality does not answer the question on how agents select their heuristic
What is the cognitivist view on emotion?
Emotional responses are required for rationality, especially in practical cases and cases of conflicting values, incomplete or unsurveyable information
