Dictionary of the History of Ideas Studies of Selected Pivotal Ideas |

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Dictionary of the History of Ideas | ||

*5. Rational Behavior.* A purpose of social science,

of law, of philosophy has been for a long time to give

meaning to the notion of “rational behavior,” to ac-

count for “irrationality,” to discover, for example in

criminal cases, whether a given individual could be

considered as having acted rationally or not. In general

there appears to exist an intuitive notion of what “ra-

tional” must mean. Frequently this notion would be

based on experience; but experience varies with each

individual, and whether any person has an intuitively

clear idea of “rationality” is doubtful. In the simple

case in which an individual wishes to maximize a

certain quantity, say utility, and *provided* he controls

*all* factors or variables on which his utility depends,

then we shall not hesitate to say that he acts rationally

if he makes decisions such that he actually obtains this

maximum, or at least moves stepwise in its direction.

Thus, rationality is predicated on two things: (a) the

identification of a goal in the form of preferences

formed, possibly stated numerically, and (b) control

over all the variables that determine the attainment

of the goal.

The first condition requires that the individual have

a clear notion of what he wants and that he possess

sufficient information which will identify the goal he

wishes to reach. The second condition requires that

the individual be able to determine first the variables,

and second the consequences of the changes he may

make in setting their values for reaching the intended

goal, and finally that he actually can set the values

of the variables as it may appear proper to him. The

amount of foresight demanded (especially if the goal

should be distant) is considerable but this point shall

not be considered further. The control factor, however,

is of primary concern: if *nature* intervenes in his in-

tended behavior, the individual can control an in-

different nature by means of statistical adjustment; the

farmer, for example, can arrange his planting so that

on the average neither a very dry nor a very wet

summer will hurt him. Whether nature is always in-

different is another question (Morgenstern, 1967). But

it is an entirely different matter if among the variables

there are some that are controlled by other individuals

having opposite aims. This lack of complete control

is clearly the case in zero-sum (winnings compensate

losses exactly) two-person games of strategy, but also

in business, in military combat, in political struggles

and the like. It is then *not* possible simply, and in fact,

to maximize whatever it may be the individual would

like to maximize, for the simple reason that no such

maximum exists. It is then not clear intuitively which

course of action is “better” than another for the indi-

vidual, let alone which one is optimal.

To determine optimal, or “rational” behavior is pre-

cisely the task of the mathematical theory of games.

*Rational behavior is not an assumption of that theory;*

rather, its identification is one of its *outcomes.* What

is assumed is that the individual prefers a larger advan-

tage for himself to a smaller one. If these advantages

can be described and measured and are understood by

the individual, and if he chooses *not* to pursue the

required course, then there is a limited definition of

*non*rational behavior for such situations. It is assumed

that the demonstration (if the theory succeeds) of the

optimal course of action is as convincing to the indi-

vidual as a mathematical proof is in the case of a

mathematical problem. But the theory allows that a

participant may deviate from his optimal course, in

which case an advantage accrues to the others who

maintain their optimal strategies.

Prior to the advent of game theory the term “ra-

tional” had been used loosely as referring to both of

the two conceptually different situations set forth

above, as if there were no difference. The transfer of

the notion of rationality from the completely control-

lable maximizing condition to one in which there is

no exclusive control over the variables is inadmissible.

This has been the cause of innumerable difficulties

permeating much of philosophical, political, and eco-

nomic writing. No side conditions, however compli-

cated, which may be imposed or exist when one is

confronted with a clear maximum problem changes the

situation conceptually. In the case where full control

exists side conditions merely make the task of reaching

the maximum more difficult—perhaps even impossible,

for example, because it may computationally be out

of reach. But even in its most complicated form it is

*conceptually* different—and vastly *simpler*—than the

problem faced by, say, a chess player or a poker player,

and consequently by any one whose activities have to

be modeled by games of strategy. The conceptual

difference does not lie in numbers of variables or in

computational difficulties; but we note that the solution

of games becomes extremely difficult both when the

number of strategies is large (even with as few players

as in chess) and also when the number of participants

increases, though each may have only a few strategies.

When there are, say, 100 variables of which one

individual controls 99 the other the remaining one, this

appears to be a different situation from that when there

are only 2 variables and each player controls one. Yet

conceptually the two are identical. No practical con-

siderations, such as possibly assigning weights to varia-

bles, and the like, in an effort to reduce difficulties of

action, will work. The fundamental conceptual differ-

the theory.

Dictionary of the History of Ideas | ||