Abstract
Axiomatic rationality is defined in terms of conformity to abstract axioms. Savage (The foundations of statistics, Wiley, New York, 1954) limited axiomatic rationality to small worlds (S, C), that is, situations in which the exhaustive and mutually exclusive set of future states S and their consequences C are known. Others have interpreted axiomatic rationality as a categorical norm for how human beings should reason, arguing in addition that violations would lead to real costs such as money pumps. Yet a review of the literature shows little evidence that violations are actually associated with any measurable costs. Limiting axiomatic rationality to small worlds, I propose a naturalized version of rationality for situations of intractability and uncertainty (as opposed to risk), all of which are not in (S, C). In these situations, humans can achieve their goals by relying on heuristics that may violate axiomatic rationality. The study of ecological rationality requires formal models of heuristics and an analysis of the structures of environments these can exploit. It lays the foundation of a moderate naturalism in epistemology, providing statements about heuristics we should use in a given situation. Unlike axiomatic rationality, ecological rationality can explain less-is-more effects (when using less information can be expected to generate more accurate predictions), formalize when one should move from ‘is’ to ‘ought,’ and be evaluated by goals beyond coherence, such as predictive accuracy, frugality, and efficiency. Ecological rationality can be seen as a formalization of means–end instrumentalist rationality, based on Herbert Simon’s insight that rational behavior is a function of the mind and its environment.
Highlights
Epistemology is often seen as a strictly normative discipline and psychology as a purely descriptive one
I will argue that axiomatic rationality can, if at all, provide norms only in small worlds, exemplified by lotteries, where the exhaustive and mutually exclusive set of future states of the worlds and consequences is known or knowable, and when these norms are limited to logical coherence
The study of the ecological rationality requires formal models of heuristics and an analysis of the structures of environments these can exploit. It lays the foundation of a moderate naturalism in epistemology, providing statements about heuristics we should use in a given situation
Summary
Von Neumann and Morgenstern are credited with having formulated the first set of choice axioms. When Savage (1954), one of the founders of modern Bayesian decision theory, laid out his own set of axioms, he attached a normative interpretation He stated limits to his theory using two specific examples, not general principles. For Savage (1954), the proverbs “Look before you leap” and “You can cross that bridge when you come to it” mark the demarcation line between the narrow domain of axiomatic rationality and the world beyond: Carried to its logical extreme, the “Look before you leap” principle demands that one envisage every conceivable policy for the government of his whole life (at least on) in its most minute details, in the light of the vast number of unknown states of the world, and decide here and on one policy Conjecture 1 The normative power of axiomatic rationality is limited to small worlds This conjecture is consistent with my reading of Savage (his writing is not known for having the same clarity as his axioms). The proposal is modest because it refrains, for the purpose of this article, from further questioning the normative value of axiomatic rationality in small worlds, as Allais, Ellsberg, and others have done, and from arguing that axiomatic rationality is merely a description of what Savage or others intuitively believe we should believe (Bishop and Trout 2005)
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