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Rationology, Rationality and Reason

Abstract

Much of the success of the Rational Choice Theory, RCT, approach to human behavior is due to interpreting the so-called Folk theorem of game theory as explaining how the so-called Hobbesian problem of social order can be solved among opportunity-seeking rational actors. However, taking future directedness of rationality seriously, RCT may not at all be an explanatory theory of rational choice. It may be what Reinhard Selten characterized and endorsed as “rationology”, a kind of “theology of rationality” or a modeling tool without independent explanatory status. These issues are addressed in relation to views on RCT ascribed to Thomas Voss.

Keywords

  • Rational choice theory
  • Folk theorem
  • Approximate explanations
  • Instrumental reason
  • Reinhard Selten
  • Thomas Voss

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Notes

  1. 1.

    I am alluding here to Michael Taylor. His seminal “Anarchy and cooperation” had a decisive influence on my own views on how to model arguments in political philosophy. It was republished in a less formal version under the title “The possibility of cooperation”; see (Taylor 1976, 1987).

  2. 2.

    My friend Manfred Holler had passed on a copy of a 1983 manuscript documenting my efforts to apply rational choice tools to reconstruct the Humean theory of institutional evolution. Then Rainer Hegselmann arranged a meeting between Thomas Voss, Werner Raub him and me in a restaurant at the old market of Dortmund. After this Rainer and I became “brothers in sin” cultivating our opposition to “deep German philosophy”. But somewhat strangely and despite my own move towards economics the collaboration with Thomas Voss and Werner Raub never took off.

  3. 3.

    “Explication” in the sense of (Carnap 1956), “explanation” in the sense of (Hempel 1966); see on explication (Siegwart 1997) see on the formal interpretation of classical game theory that is neutral with respect to the preceding distinction (M. Albert and Kliemt 2021).

  4. 4.

    The introduction to (Kleene 1952) and the more popular (Nagel and Newman 2008) still provide lucid introductions to structural thinking.

  5. 5.

    In economics old metaphysical conceptions pre-dating the rise of Non-Euclidean geometries in the second half of the nineteenth century lingered on in particular in v. Mises’ work on rational choice. They are still popular among many, not only “Austrian economists”. Though Reinhard Selten rejected claims to empirically relevant a priori insights he was indirectly influenced by some Austrian ideas. Biographically it is noteworthy but not commonly known that Heinz Sauermann – who together with Selten founded the German branch of experimental economics in the 1960′s independently but parallel to Vernon Smith’s efforts in the US – finished his dissertation in Vienna and became familiar with the ideas floated by Mises. That these aspects of the social network of science may be relevant, regrettably dawned on me only when it was too late to ask Reinhard Selten himself about them; see for background and references (Kliemt 2017).

  6. 6.

    See (H. Albert 1985); a view to which Thomas Voss seems to subscribe in principle, too.

  7. 7.

    (Friedman 1953) is still popular in one way or other. On the issue of approximate explanations I am following Max Albert; see (M. Albert and Kliemt 2017).

  8. 8.

    With Harry Belafonte it seems “clear as mud but at least it covers the ground” https://www.youtube.com/watch?v=LvN6-RK66Bo.

  9. 9.

    In (Diekmann and Voss 2018) we read in Sect. 5: „Rationalität “ ist aber nicht mehr (und nicht weniger) als konsistentes Handeln.” It seems to me from the context of the paper and from (Voss 1985) that here “konsistentes Handeln” is characterized by the axioms that guarantee representability of preferences by a utility function as invoked in the revealed preference conception.

  10. 10.

    Behavioral choices resulting from internalized norms of behavior can be consistent and be representable by utility functions whether they be in the material interest of actors or not etc.

  11. 11.

    This use of terms is justified in more detail in (Kliemt 2020).

  12. 12.

    In (Habermas 1983).

  13. 13.

    An adequate conception of practical reason cannot be founded on modern accounts of the scope and limits of reason since “(a)ll reject any teleological view of human nature, any view of man as having an essence which defines his true end. But to understand this is to understand why their project of finding a basis for morality had to fail.” (MacIntyre 1984, p. 54).

  14. 14.

    (Berggren 2016) is particularly instructive on some of the psychological motives behind these attitudes.

  15. 15.

    Extending Jeremy Bentham’s laconic remark “that the demand for a right is no more that right than hunger is bread” (Bentham 1843) it may be stated that ‘the demand that a fact exist is no more that fact than hunger is bread’. Though this may seem of triumphant banality in theory in the practice of social theory and so-called “political disourse” it is routinely violated along with the values expressed by Gilboa.

  16. 16.

    It may be interesting as an aside of not merely personal relevance that I came to RCT through Rawls when reading his theory of justice as a philosophy student (Rawls 1971). Rawls had been very strongly influenced by his reading of Baumol’s RCT text of 1961 (Baumol 1972). This attracted me in my parallel bread-winning studies of BWL, Business Administration, to OR. In my OR training I was warned that game theory is useless because it – except for zero sum games – does not provide a closed solution theory. When I was later teaching OR as a research assistant in an economics department it took a political philosophy book (Taylor 1976) to stir up my interest in game theory. For me it was too late for a thorough training in the field but even as a pedestrian game theorist I wonder what would have become of social and political philosophy had Rawls been exposed to (Schelling 1960) instead of Baumol’s text. It helped at least me to abandon contractarianism for good; see for a technical game theoretic account of some aspects (Okada and Kliemt 1991).

  17. 17.

    James Buchanan, when asked in 1998 with other Nobel Prize laureates in economics what the most important developments in economics in the years before the turn-of-the-century were, initially named several as did other laureates. But “thinking twice” he came to the conclusion that he should revise his view to single out game theory; see (Buchanan 2001). Further comments can be found in the celebratory reprint of von Neumann’s and Morgenstern’s seminal “Theory of Games and Economic Behavior” (Buchanan et al. 2001).

  18. 18.

    If I should misattribute this tenet to Thomas then this can be hopefully be clarified for good over a coffee in Munich sometimes in the future should he read this paper and take issue with it.

  19. 19.

    The distinction to rival sociological and social psychological approaches hinges on the different treatment of instrumental rationality and opportunism.

  20. 20.

    Yet, as later sections of this essay show, I am uncertain why exactly RCT is useful and for what purposes.

  21. 21.

    As understood here the rules comprise everything that is beyond the influence of moves of the actors as chosen in a play of the game. Note that not only the extensive game form in substantive payoffs but the preference ordering of possible “plays” are beyond the causal influence of choices within plays of the game.

  22. 22.

    This may seem utterly trivial. And, in a way it is. However, many of the more heated debates concerning rational choice models arise from violations of the explicitness norm – e.g. commitments that are not explicitly modeled are assumed to exist; see for more on this (Güth and Kliemt 2007).

  23. 23.

    This makes precise communication in particular in the burgeoning field of PPE (philosophy, politics, and economics) viable across disciplinary boundaries.

  24. 24.

    Many of the disputes concerning the interpretation of RCT can be avoided by distinguishing strictly between the two elements of the pair (game form, game). This has been one of the reasons for developing an indirect evolutionary approach that basically works both – the objective and the subjective – sides of the street by including both the “objective/substantive” payoffs and the “subjective payoffs” that represent as utilities the subjective rankings of objective payoffs by personal actors; see (Güth and Yaari 1992; Güth and Kliemt 1994; Berninghaus et. al. 2003, 2012).

  25. 25.

    The relative neglect of future-oriented opportunism as compared to consistency of preferences seems to me prevalent in the impressive dissertation Voss (1985), as well as in an early programmatic paper by Hegselmann et al. (1986). My contrary position is to be found in (Kliemt 1987). Since what I have to say is in this regard not meant to be merely ad hominem I will not go into exegesis of that older paper.

  26. 26.

    Independently of the empirical truth or falsehood of Hicks’ statement it is noteworthy that it appears in his “causality in economics”. The quasi-teleological character of the psychology of choice making can be made compatible with the conception of a “causally closed world” in which events occur subject to stochastic law-like regularities in causal networks; see (Pearl 2000).

  27. 27.

    Since they are assumed to be self-regarding, too, only the payoff accruing to the individual actors matters.

  28. 28.

    The “chain store paradox” being the perhaps most famous of the backward induction paradoxes in economics; (Selten 1978).

  29. 29.

    The finiteness condition can be rendered comparatively more acceptable by overlapping generations models as suggested in (Kandori 1992) and concretely illustrated in (Brennan and Kliemt 1994). But formally this does not help.

  30. 30.

    Albert and Kliemt (2017) argue that it cannot be treated as an innocuous assumption.

  31. 31.

    One characterization of infinity is that (“paradoxically”) an infinite set may be of the same power (has in a certain sense the same number of elements) as a proper subset of the set. Whereas a man with five fingers on the one and four on his other hand cannot “map” the two sets of fingers one-to-one (the fifth finger of the one hand does not have a counterpart on the other) the set of natural numbers can be mapped one-to-one on a proper subset (e.g., the squares of natural numbers and the natural numbers can be so matched ((1, 12), (2, 22), (3, 32) …) without leaving any number unmatched. Accordingly, in sequences npd with n→∞ the future after any finite sequence is of the same power and by the assumption of identically repeated game forms pdt = pd0 is structurally the same – composed of identical objects except for isomorphic renumbering.

  32. 32.

    Excluding cycles etc. would require additional considerations but the basic intuition should be clear. A formal account can be found in (Güth et.al. 1991).

  33. 33.

    For a more recent treatment of related topics, see (Qu et al. 2014).

  34. 34.

    Dualism is related to the distinction between a participant’s internal and an objective external observer’s point of view. How this plays out in the interpretation of game theory as a tool of moral science is discussed philosophically in Kliemt (2009).

  35. 35.

    As in the case of Herbert Hart’s „the concept of law”, to explicate “law” a whole theory must be developed in case of “ideal rationality” in interactive choice making. Other than in the case of (Hart 1961) who wanted to provide a realistic theory built on stylized facts, Selten intends to present an ideal theory separate from behavioral facts as an explication.

  36. 36.

    Spinoza shook off the last residuals of the older tradition of making what is conducive to survival an indisputable ultimate aim (an externally “imposed” telos as in McIntyre) that lingered on in the work of Hobbes. Spinoza endorsed a fully “economic” rational choice account in terms of subjective aims, ends or values; see on this also (Steinberg 2013). When I used this citation some ten years ago at a symposium in Berlin with critical intention it was rather amusing that Karl-Dieter Opp who attended also, asked with a sparkle in his eyes for the specific references since he thought that it was representing his own position so well.

  37. 37.

    A popular, yet strikingly elegant and well-informed way to bring together many relevant insights from a vast literature can be found in Sapolsky (2017).

  38. 38.

    Including their Cartesian and Kantian variants popular among rationalists ranging from von Mises to Habermas.

  39. 39.

    That theories about the world influence the world was addressed in (Morgenstern 1928).

  40. 40.

    Theory absorption is an interesting topic for equilibrium theory, but beyond the present paper; see (Morgenstern 1972; Morgenstern and Schwödiauer 1976; Dacey 1976; Schotter 1992; Güth and Kliemt 2004).

  41. 41.

    Binmore’s (1987/88) terms of eductive and evolutionary game theory broadly aim at the same as Selten’s distinction between rationology and empirical theory of boundedly rational behavior, though without any allusion to theology.

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Kliemt, H. (2021). Rationology, Rationality and Reason. In: Krumpal, I., Raub, W., Tutić, A. (eds) Rationality in Social Science. Springer VS, Wiesbaden. https://doi.org/10.1007/978-3-658-33536-6_3

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