The Bias Bias in Behavioral Economics

Re:The Bias Bias in Behavioral Economics by thaumasiotes on Tuesday February 12, 2019 @02:03AM (#19141617)

> So a "rational" actor in economics seem (to me at least) to mean the typical selfish bastard who only acts to maximise their own profit outcome, no matter how its defined, and excludes a green warrior buying a good or chattel to NOT use it, or somebody buying it to give to charity, or buying it to round up another charge to get north of a shipping fee but its a nonce purchase and has no intent or purpose.

This is completely unrelated to what economics means by referring to a rational actor. A rational actor is just one who, given a choice, will take the action that produces the all-inclusive result they most prefer. You're talking about someone whose only preference is having the greatest amount of money, but economics contemplates all possible preference sets, which is why it measures benefit in "utils".

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Re:The Bias Bias in Behavioral Economics by ggm on Tuesday February 12, 2019 @04:27AM (#19142171)

So what you're saying is, that in the domain of study it means something which in common parlance, nobody understands. Because when any politician gets on their hind legs to bray about rational actors and efficient markets, they sure as hell aren't talking about "utils" to the taxpayer, are they?

Let me ask you a question. Do you think the word "rational" in rational actor, rational investor and rational market, has exactly the same meaning? Do you think as people commonly understand these terms (I don't mean economists) the answer would be the same?

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Re:The Bias Bias in Behavioral Economics by jerf on Tuesday February 12, 2019 @09:32AM (#19143713)

"Because when any politician gets on their hind legs to bray about rational actors and efficient markets, they sure as hell aren't talking about "utils" to the taxpayer, are they?"

Do you even mean this as a serious argument? Can your favorite field survive politician's (politician, from "polis", city, and "-tician", "person": 1. professional liar 2. scumbag 3. one who professionally holds office) handling of their terminology?

Nor can I find it a terribly serious argument that "common people", i.e., people who aren't in the field and don't know the definition, don't know the definition. That's just shy of begging the question, except there's a small sliver of people "in the field" who don't yet know the definitions, called students.

I'm trying my best to unpack your words into some sort of actual argument but I can't find it.

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Re:The Bias Bias in Behavioral Economics by thaumasiotes on Wednesday February 13, 2019 @12:38AM (#19150732)

> politician, from "polis", city, and "-tician", "person"

I know you didn't really mean this, but polit/ic/ian -- "polit" is from polis, city; "ic" is a Greek adjective-forming element; and "an" or here "ian" is a Latin adjective-forming element. "Polit" is the only part of the word that bears any semantics (in the etymology). The Greek root for person would be "anthrop", which isn't present.

(The root for "man", an adult male, is "andr", which is why it's so hilarious to Italians that English speakers think Andrea is a girl's name.)

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Re:The Bias Bias in Behavioral Economics by thaumasiotes on Tuesday February 12, 2019 @06:21AM (#19142614)

> Do you think the word "rational" in rational actor, rational investor and rational market, has exactly the same meaning?

Rational actor and rational investor, the same. Rational market, different. But I only know the term "rational market" through its use in the fixed expression "the market can stay irrational longer than you can stay solvent".

> Do you think as people commonly understand these terms (I don't mean economists) the answer would be the same?

I guess I can't really speak to this.

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Re:The Bias Bias in Behavioral Economics by mcguire on Tuesday February 12, 2019 @12:36PM (#19145606)

Is loss aversion rational? To an economist, no. To most seemingly rational people, apparently.

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Re:The Bias Bias in Behavioral Economics by AstralStorm on Wednesday February 13, 2019 @01:41PM (#19155485)

That is because economy did not allow for bounded rationality. They're talking about optimally rational with perfect knowledge. Also known as a spherical cow.

Ultimately, rational is supposed to mean reasoned, not optimal. Heuristics can be rational if applied with reason and devised with good valid reasoning.

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