We Are Designed to Be Irrational, and So Are Other Primates

by Luke Muehlhauser on August 13, 2010 in Video

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{ 6 comments… read them below or add one }

G'DIsraeli August 14, 2010 at 1:33 am

God gave us great tools for utilizing our moral choices!
A soul that overrides causality…Yeah right.
Sociology (cognitive biases and dissonance) is a good response to the theodicie of “god wants you to use your free will”, never mind neuroscience.

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Hermes August 14, 2010 at 5:55 am

That falls in line with the trolley problem.

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Steve Maitzen August 14, 2010 at 7:38 am

I agree with her general claim that humans (and maybe other primates) tend to reason irrationally, or have irrational biases, but I don’t see how her experimental results support the claim.

If I have (1) a 50% chance of a $1000 gain, then (according to standard decision theory), I should be indifferent between (1) and (2) a situation in which I will certainly gain $500. (We have to assume that money has a constant marginal utility.) Likewise, if I have (3) a 50% chance of a $1000 loss, that’s the same as (4) a certain loss of $500, according to the standard theory.

Yet humans and primates seem to prefer (2) to (1) and (3) to (4): both are asymmetries. But how irrational are those asymmetries, really? Like any commodity (including grapes), money in fact has diminishing marginal utility (contrary to idealized decision theory), in which case (1) and (2) aren’t really parallel. Our asymmetric attitude toward (3) and (4) is harder to defend, but it doesn’t seem howlingly irrational. In any case, neither result seems to explain the degree of irrationality responsible for (e.g.) the financial or mortgage crises. I don’t see the bearing of her results.

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Lorkas August 14, 2010 at 1:13 pm

Yet humans and other primates seem to prefer (2) to (1) and (3) to (4): both are asymmetries.

There I fixed it.

The thing that bothers me is that the average gains/losses of the choices are all the same, so you can’t say it’s irrational to choose one over the other in either choice. It would be much more compelling if the experiment were altered to demonstrate that the loss-aversion bias (wherein all primates tend toward more risky behavior when thinking in terms of losses) persists even when risky behavior clearly has a lower average yield than safe behavior does.

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Bram van Dijk August 16, 2010 at 3:52 am

Hi Steve,

Economists have shown that money does not have a constant marginal utility but decreasing marginal utility. This means that we would expect people to value (2) over (1) and (3) over (4).

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Steve Maitzen August 16, 2010 at 10:41 am

Hi, Bram.

Economists have shown that money does not have a constant marginal utility but decreasing marginal utility.

Right, which is why I said so:

Like any commodity (including grapes), money in fact has diminishing marginal utility (contrary to idealized decision theory), in which case (1) and (2) aren’t really parallel.

So far, so good. But the diminishing marginal utility of money doesn’t explain our preference for (3) over (4). The first $500 is worth more to us than the second $500, so we ought to prefer a certain loss of the second $500 over a 50% chance of losing both the second and the first $500. Given the diminishing marginal utility of money, our preference for (3) over (4) is the opposite of what you’d expect.

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