The problem with Lay Rationality

I haven’t written about rationality for a while but I’ll return to note a recent paper by Xilin Li and Christopher Hsee where they look at the impact of lay views of rationality. It is a fun paper and, broadly speaking, I agree that their conclusion has validity.

The authors’ basic idea is that when you tell people to focus on rational decision making they look for economic and objective reasons. These are termed ‘cold’. These contrast with more feeling based, subjective, ‘warm’ reasons. The challenge is that these cold reasons aren’t necessarily what make people happy. They suggest the lay view of rationality, cold decision making, contrasts with true rationality (which they call Benthamian-Kahnemanian rationality) that involves maximizing utility. (Making the decision maker happy, in a broad sense of happiness).

Occasionally I wasn’t totally on board with their tests. The economic reasons they gave seemed to include the original (i.e. pre-sale) price. I think many would argue this should be an irrelevant point in economic decision making. As such it isn’t surprising that considering this leads to bad decisions. They also seem to suggest that rating twice as many pictures is the same effort as rating half as many. I think in practical terms they are approximately right – neither was especially arduous – but technically their definitions could be tightened. They also suggest that there are real-world consequences for the decisions in their experiment. Let me just say that the real-world consequences didn’t look especially consequential to me.

That said, I don’t want my relatively minor concerns to detract from the fact that I believe their main point. I worry that people think rationality is about doing certain things that fit with their ideas of (often economic) decision making rather than using the most appropriate decision-making process. This can in certain circumstances lead to poor decisions, (not surprisingly where subjective feelings determine happiness). As the authors say: “Practically, the present research cautions people that the age-old and widespread advice to be rational in decision-making can be counterproductive, leading decision makers to sacrifice their happiness with no real benefits.” (Li and Hsee, 2019, page 122).

Read: Xilin Li and Christopher K. Hsee (2019) Being “rational” is not always rational: Encouraging people to be rational leads to hedonically suboptimal decisions, Journal of the Association of Consumer Research (JACR), 4 (2), pages 115-124