Showing papers on "Rationality published in 1983"

Sour Grapes: Studies in the Subversion of Rationality

Abstract: Preface and acknowledgements 1. Rationality 2. States that are essentially by-products 3. Sour grapes 4. Belief, bias and ideology References Index.

The Origin of Predictable Behavior

Abstract: Despite vigorous counterargument by its proponents, optimization theory has been persistently attacked as an acceptable explanation of behavior. In one form or another, these attacks repeat the oldest critique of economics; namely, the ability of agents to maximize successfully. Over the years, this critique has taken various forms which include information processing limitations in computing optima from known preference or utility information, unreliable probability information about complex environmental contingencies, and the absence of a well-defined set of alternatives or consequences, especially in an evolving world that may produce situations that never before existed. These complaints are not new to economics. Indeed, they have been present during the very intellectual sifting process that produced neoclassical optimization and general equilibrium theory. Thus, if we are to further elaborate this critique of conventional theory, the basic issue is whether there is anything new that is worthy of attention by someone well versed in standard tools and concepts. Are we simply advancing more refined or cleverly argued versions of older critiques, or extensions of them to areas not previously emphasized? Such arguments would still represent an attack on the basic rationality postulate of economics (that agents are able to maximize), but without providing a clear alternative to traditional optimization theory. However plausible these arguments might be, ultimately they must be set aside by someone desiring a theoretical understanding of behavior, unless they lead to another modeling structure whose analytical ability can be explored and compared with existing optimization theory. Another argument focuses on the desire to understand the "real" dynamic processes that actually generate observed behavior. In contrast, optimization is thought of as a surrogate theory based on false assumptions about agents' capacity to maximize. Thus, it can be defended only in terms of empirical testability, without really illuminating the underlying processes determining behavior. Nevertheless, even if this view was fully accepted, it is unlikely by itself to cause a major shift away from conventional thinking. The reason is that evolutionary processes have long ago been interpreted as one of the key mechanisms tending to produce optimizing behavior; or conversely, optimizing models will predict the behavior patterns that will survive in an evolutionary process tending to select relatively superior performance.' The latter interpretation is in fact one of the dominant justifications for standard models against the criticism of unrealistic assumptions (i.e., the surviving agents of a selection process will behave "as if" they are able to maximize).2 *Department of Economics, Brigham Young University, Provo, UT 84602. I am indebted to Axel Leijonhufvud for constant encouragement about applications to economics, and for numerous stylistic suggestions. Harold Miller helped familiarize me with a broad range of issues across the sociobiological, psychological, and behavioral science literatures. James Buchanan provided stimulating discussion about conceptual issues. I have also benefited from the advice and criticism of Armen Alchian, Ron Batchelder, Bruce Brown, Robert Clower, Daniel Friedman, Jack Hirshleifer, Kai Jeanski, Randy Johnson, Edward Leamer, Stephen Littlechild, John McCall, James McDonald, Richard Nelson, Gerald O'Driscoll, Dennis Packard, Clayne Pope, Lionello Punzo, Ezio Tarantelli, and Sidney Winter. Needless to say, these colleagues are not responsible for inadequacy in the conceptual framework or scope of ideas presented. 'See in particular Armen Alchian's well-known 1950 paper, and also Sidney Winter, 1964, 1971; Jack Hirshleifer, 1977; Richard Nelson and Winter, 1974. 2A still used reference on the "as if" point of view is Milton Friedman's 1953 paper. Some recent journal illustrations are Benjamin Klein and Keith Leffler, 1981, p. 634; Richard Posner, 1980, p. 5; Hirshleifer, 1977, p. 50; Nelson, 1981, p. 1059. The ultimate extension of this view is to claim not that agents are able to maximize (select most preferred actions), but rather that any ob-

A Century of Demographic and Cultural Change in Western Europe: An Exploration of Underlying Dimensions

Abstract: A fertility decline is in essence part of a broader emancipation process. More specifically, the demographic regulatory mechanisms, upheld by the accompanying communal or family authority and exchange patterns, give way to the principle of individual freedom of choice, thereby allowing an extension of the domain of economic rationality to the phenomenon of reproduction. In an earlier article, drawing on the record of Western Europe, I examined social control and the regime of natural fertility. I The first aim of this article is to follow through the evolution of reproduction and changes in family life, drawing on later stages of that same record. The purpose of this exercise is to explore the extent to which current changes in fertility and nuptiality in the region can be viewed as manifestations of a cultural dimension that had already emerged at the time of demographic transition in Europe. Much of the empirical evidence presented here pertains to this issue. The second aim of the article is to place the findings in a broad theoretical framework. Although we shall stress an important sociological component and its historical development, one should not consider the'evidence as incompatible with other subtheories that follow, for instance, the microeconomic approach. In fact, microeconomic analysts will probably find it comforting to see the extension of the domain of economic rationality and of the principle of individual choice traced historically and documented statistically. But, equally central to the philosophy of this article is the argument that the various ways in which persons engage in the calculation of relative advantage reveal more than the algebraic capacities of individuals and their level of perception of opportunities and constraints. More specifically, if persons engage in an evaluation of utilities and disutilities, they operate on the basis of a preference map, and if such a preference structure exists, there must also be a meaninggiving or ideational system that directs it. There is no reason to believe that

Substantive and reflexive elements in modern law

Abstract: spheres of action for the autonomous pursuit of private interests. In doing so, it guarantees a framework within which substantive value judgments are made by private actors. Thus, "formalities" facilitate private ordering. They are "premised on the lawmaker's indifference as to which of a number of alternative relationships the parties decide to enter" (Kennedy, 1976: 1685; cf. Heller, 1979: 187). The corollary elements of formal law are: conventionality, legalism, and universalism (Habermas, 1976: 264; cf. Unger, 1976: 204). (2) With this orientation, formal law fulfills specific external social functions. Formal law develops its own system rationality insofar as it establishes spheres for autonomous This content downloaded from 207.46.13.80 on Thu, 11 Aug 2016 06:13:06 UTC All use subject to http://about.jstor.org/terms

Selfishness, Altruism, and Rationality: A Theory of Social Choice

Abstract: Why do we volunteer time? Why do we contribute money? Why, even, do we vote, if the effect of a single vote is negligible? Rationality-based microeconomic models are hard-pressed to explain such social behavior, but Howard Margolis proposes a solution. He suggests that within each person there are two selves, one selfish and the other group-oriented, and that the individual follows a Darwinian rule for allocating resources between those two selves. "Howard Margolis's intriguing ideas . . . provide an alternative to the crude models of rational choice that have dominated economics and political science for too long."-"Times Literary Supplement"

Negotiator Judgment: A Critical Look at the Rationality Assumption

Abstract: This article overviews prescriptive research, specifies limitations of that research direction, and introduces a complementary research approach that focuses on the judgmental limitations of negotiators. Specifically, this complementary approach examines how systematic deviations from rationality in negotiator judgment reduce the effectiveness of negotiators.

Pluralism and Social Choice

Abstract: Pluralist political theory identifies certain patterns of political preferences as promoting the “stability” of democratic political systems and others as threatening to such stability. Social choice theory likewise identifies certain patterns of political preferences as leading to “stability” in social choice under majority rule and related collective decision rules, and other patterns as leading to “unstable” social choice. But the preference patterns identified by pluralist theory as promoting stability are essentially those identified by social choice theory as entailing instability. Thus the notions of stability and the implicit normative criteria associated with the two theories are very close to being logically incompatible. This incompatibility suggests that the social choice ideal of collective rationality may not be one that we should endorse. Indeed, the generic instability of the pluralist political process and its consequent collective irrationality may contribute to the stability of pluralist political systems.

The Two Camps on Rationality

Abstract: Publisher Summary Rationality is not a genuine term of scientific psychology but rather a concept of philosophy and economics. The most common and most relevant definition says that an action is rational if it is in line with the values and beliefs of the individual concerned; or more precisely, if it is logical or consistent as stated in a set of axioms. This definition specifies rational behavior normatively. Empirical research can study whether actual human behavior is rational in the sense that it obeys the norm. This chapter distinguishes two camps, one that points to the deficiency and one that argues for the efficiency of human judgment and decision. The members of the first camp—pessimists—claim that judgment and decision making under uncertainty often show systematic and serious errors because of in-built characteristics of the human cognitive system. The optimists of the other camp claim that judgment and decision are highly efficient and functional even in complex situations.

Rationality and Charity

Abstract: Quine and others have recommended principles of charity which discourage judgments of irrationality. Such principles have been proposed to govern translation, psychology, and economics. After comparing principles of charity of different degrees of severity, we argue that the stronger principles are likely to block understanding of human behavior and impede progress toward improving it. We support a moderate principle of charity which leaves room for empirically justified judgments of irrationality.

Indetermination: professional knowledge, organization and control

Abstract: This paper is a critique of the tradition of sociological writing which has emphasized the ability of occupations organized on the professional principle to gain for their members an occupational monopoly and a position in the division of labour which provides them with autonomy to determine occupational tasks and functions. It is argued that theories which seek to account for the conditions which provide the framework for successful resistance to rationalization and codification in professional work have not adequately articulated the concept of power. The theoretical discourse on professional and managerial power has therefore tended, with few exceptions, to locate the determination and exercise of power as though it were a zero sum commodity deriving from social relations of organizations. Theories predicting the emergence of professional rather than mangerial forms of control therefore have little explanatory ability other than for a particular mode of rationality within a limiting theoretical framework. This analysis represents an attempt to propose a mediation between structuralist theories of power and organization and those theoretical reflections on the professions which locate the determination of occupational authority in a broader matrix of social processes. Copyright

Critique of scientific reason

Abstract: A systematic critique of the notion that natural science is the sovereign domain of truth, "Critique of Scientific Reason" uses an extensive and detailed investigation of physics and in particular of Einstein's theory of relativity to argue that the positivistic notion of rationality is not only wrongheaded but false. Kurt Hubner contends that positivism ignores both the historical dimension of science and the basic structures common to scientific theory, myth, and so-called subjective symbolic systems. Moreover, Hubner argues, positivism has led in our time to a widespread disillusionment with science and technology."

Reason and Rationality during Energy Crises

Abstract: This paper develops a technique for extracting the expectations embedded in the current prices of energy-using durable goods and applies it to used car markets during the two energy "crises" of the 1970s. The resulting estimates indicate that consumers took the energy crises seriously and formed expectations about future gasoline prices that appear rational when compared with the historical gasoline price series, with the forecasts of specialists and experts, or with the actual postsample behavior of gasoline prices. The evidence therefore supports the view that consumers are able to make rather complex choices with a great deal of rationality and casts doubt on the wisdom of policies based on assumptions to the contrary.

The Social Construction of Ageing through Work: Economic Structure and Life-world*

Abstract: The analysis of modern-age stratification systems must be based on the social organisation of work. This requires a theoretical approach that takes into account the structure of economic production, but also the fact that work is a meaningful activity of human beings within their life-world. The task therefore consists of integrating ‘materialist’ and ‘interpretive’ approaches to social reality. This integration is attempted in an examination of the special problems encountered by workers in the second half of their work life, as created by the ‘construction of ageing’ in the industrial firm. Existing approaches drawn from industrial sociology, stress structural features of the production process, whilst labelling theory stresses culturally induced age labels. Both are one-sided. A more comprehensive approach has to conceptualise the industrial firm as an actor with strategies based on economic rationality and as a life-world constituted by what is taken for granted by its members. The final section applies this framework to an empirical case study.

The role of rationality in university budgeting

Abstract: Many organizational functions, such as institutional research, assume that organizations make decisions rationally. The assumption is largely unjustified by empirical accounts of actual decision making. Higher education institutions are usually seen as political, collegial, or anarchic in their decision patterns. This study tests the participants' claim that the budget decision making process at Stanford University during the 1970s was rational. Although the study tends to support the claim, the results are neither conclusive nor comprehensive. The study provides (1) a rigorous and replicable procedure for testing the rational model, (2) evidence that rational decision making is feasible in higher education, and (3) grounds for refusing to assume pure rationality without abandoning hope of any rationality.

The Myth of Rationality: Development Planning Reconsidered:

Abstract: The classical model of rational planning is fundamentally flawed. It assumes widespread consensus on goals, causal theory sufficiently developed as to permit prediction, and effective instrumental ...

The Role and Status of the Rationality Principle in the Social Sciences

Abstract: How can we explain and predict human behaviour and, in particular, behavioural regularities in a social setting? Adequate answers to questions of this type have been of interest to influential traditions in the social sciences and in particular to sociology, economics, anthropology, and psychology.2 The main concern of the present paper is a particular type of answer — let us call it a ‘rationalistic answer’ — to the above question. Rationalistic answers have been especially influential in economics, where an elaborate theoretical structure was built on a particular conception of human behaviour. The coherence, elegance and apparent problem-solving ability of the theoretical framework of neoclassical economics is probably responsible for the longevity and relative immunity of the rationalistic approach from incisive criticisms which have been levelled against it in the last few decades.3

The rationality of reasonableness

Abstract: Rationality and reasonableness are often sharply distinguished from one another and are even held to be in conflict. On this construal, rationality consists in means-end calculation of the most efficient means to one's ends (which are usually taken to be self-interested), while reasonableness consists in equitableness whereby one respects the rights of other persons as well as oneself. To deal with this conflict, it is noted that both rationality and reasonableness are based on reason, which is analyzed as the power of attaining truth, and especially necessary truth. It is then shown that, by the rationality involved in reason, the moral principle of reasonableness, the Principle of Generic Consistency (PGC), has a stringently rational justification in that to deny or violate it is to incur self-contradiction. Objections are considered bearing on relevance and motivation. It is concluded that, where reasonableness and egoistic rationality conflict, the former is rationally superior.

The behavioral approach: With emphasis on economics

Abstract: This paper reviews the need for economics to develop as an empirical science as opposed to becoming a branch of applied mathematics. The authors show why a behavioral approach is needed and focus on the theory of the firm as an example. To illustrate the point, the authors demonstrate the difficulties of testing the neoclassical theory of the firm as attempted by D. W. Jorgenson and his associates. Specifically, the paper analyzes three kinds of studies relating to the claim of empirical verification of neoclassical theory. These studies relate to: 1The demonstration that the exponents in the labor term of fitted Cobb-Douglas function are nearly equal to labor's share of income; 2Evidence that firms' short-run and long-run cost curves are U-shaped; and 3Evidence that firms' investments are best explained by regressions whose form is derived from neoclassical theory. The argument in favor of a behavioral approach is based in part on the body of research that has given us a picture of the nature of rationality in the real world. In addition, the authors argue that profit maximization under uncertainty has no unequivocal meaning. The authors conclude that a theory of decision making within organizations that combines both the internal variables of the firm and the market forces of the particular market structure the firm is operating within can be developed. Indeed substantial progress has been made toward formulating and testing such a theory. This paper aims to encourage such work in the face of the claims of the validity of the conventional approach. Clearly the methodology espoused is relevant for many of the social sciences.

Rationality and the psychology of inference

Abstract: Recent advances in the cognitive psychology of inference have been of great interest to philosophers of science. The present paper reviews one such area, namely studies based upon Wason's “4-card” selection task. It is argued that interpretation of the results of the experiments is complex, because a variety of inference strategies may be used by subjects to select evidence needed to confirm or disconfirm a hypothesis. Empirical evidence suggests that which strategy is used depends in part on the semantic, syntactic, and pragmatic context of the inference problem at hand. Since the factors of importance are also present in real-world science, and similarly complicate its interpretation, the selection task, though it does not present a “quick fix”, represents a kind of microcosm of great utility for the understanding of science. Several studies which have examined selection strategies in more complex problem-solving environments are also reviewed, in an attempt to determine the limits of generalizability of the simpler selection tasks. Certain interpretational misuses of laboratory research are described, and a claim made that the issue of whether or not scientists are rational should be approached by philosophers and psychologists with appropriate respect for the complexities of the issue.