Anomalous Presumptions

I’m reading a lovely little book by H. Peyton Young, Individual Strategy and Social Structure, very dense and tasty. I checked out what he had done recently, and found “Individual Learning and Social Rationality” in which, as he says, “[w]e show how high-rationality solutions can emerge in low-rationality environments provided the evolutionary process has sufficient time to unfold.”

This reminded me of work by Duncan Foley on (what might be called) low-rationality economics, beginning with “Maximum Entropy Exchange Equilibrium” and moving to a more general treatment in “Classical thermodynamics and economic general equilibrium theory“. Foley shows that the equilibria of neoclassical economics, typically derived assuming unbounded rationality, can in fact be approximated by repeated interactions between thoughtless agents with simple constraints. These results don’t even depend on agents changing due to experience.

So from the careful, well grounded results by these two scholars, I’d like to take an alarmingly speculative leap: I conjecture that all rationality is an optimization, which lets us get much faster to the same place we’d end up after sufficiently extended thoughtless wandering of the right sort. This hardly makes rationality unimportant, but it does tie it to something less magical sounding.

I like this way of thinking about rationality, because it suggests useful questions like “What thoughtless equilibrium does this rational rule summarize?” and “How much rationality do we need to get close to optimal results here?” In solving problems a little rationality is often enough, trying to add more just may just produce gratuitous formality and obscurity.

At least in economics and philosophy, rationality is often treated as a high value, sometimes even an ultimate value. If it is indeed an optimization of the path to thoughtless equilibria, it is certainly useful but probably not worthy of such high praise. Value is more to be found through comparing the quality of the equilibria and understanding the conditions that produce them, than by getting to them faster.

Filed by Jed at 1:10 am under Economics, Population thinking, Social order
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