We often hear about rational behaviour when we consider various economic models and political concepts, but what does it actually mean to be rational? Is it possible to make a rational decision?
Rationality is usually defined as decisions or actions that are based on reason or logic. Rationality requires using logic and reason in order to find contradictions and eliminate options that would result in the worst outcomes. Economists often assume that rational individuals are forward-looking and will behave in ways that will maximise their personal utility. However, this assumption implies that individuals have an understanding of future events and that they know which course of action will produce the most desirable results. So is it possible to make a rational decision with so many unknowns?
Bence Nanay, Professor of Philosophy at the University of Antwerp recently wrote the article “Why Humans Are The Most Irrational Animals” where he discusses how one’s imagination impacts their decisions, and so their actions themselves cannot be considered rational. He argues that when an individual makes a decision they imagine themselves in all situations and make a decision on which action would produce the most favourable outcome. However, these imagined situations are often nothing like reality but often skewed by our own perceptions and delusions. Imagine you cannot decide between two different university degrees, let's say PPE and History. You may base your choice off of job prospects or the types of people you expect to study with. These perceptions may be skewed by existing biases, the people you have already met and even films or books, so our expectations may differ from reality in many different and unexpected ways. In addition to this, we also imagine our current selves in these situations when in fact our current selves could not be there as we have not yet made that decision nor been changed because of it. But we also cannot imagine our future selves in these different situations as we cannot know in what ways we will change and how our decisions will shape us. I think that Nanay’s article highlights how uncertainty in one’s actions results in uncertainty which undermines rationality.
Matthew Bevis, Professor of English Literature at Oxford University, considers part of rationality to be able to differentiate x from y, consistently getting the right answer. This sounds simple, but when we start to think about it, it can become a lot more difficult. Can you always separate those who are happy from those who are unhappy? This distinction becomes difficult, so can we make this rational decision on the limited observations we have? I think that is is important to consider the amount of information we have available to us before we can claim to make “rational” decisions, as often our sources are limited.
With the limited capacity of predicting the future, and inability to categorize x from y consistently, our judgement on whether or not our actions may be considered rational is dependant on the opinion of the individual. The judgement of what can be considered rational is largely left unclear and can be left open for debate.