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To: On the Road to Serfdom
Rational means a person weighs the benefits and costs in their own mind and acts accordingly.

I agree, but it isn't the act of weighing; it is the choice of an objectively better outcome that makes the choice rational. A rational person seeks to maximize an objective value, like, say, utility. So they'll typically assume that given a set of fixed alternatives with known probabilities of outcomes, a person will behave in the manner that will result in highest utility.

Choosing suboptimal outcomes is simply irrational. That's all there is to it.

58 posted on 11/28/2007 10:41:58 AM PST by Publius Valerius
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To: Publius Valerius
a person will behave in the manner that will result in highest utility.

My statement would assume that people would value money more than the thrill of playing. I think this is a safe assumption because most people eventually take the banker's offer, which seems to demonstrate that the thrill of playing does not outweigh the utility of the money in the briefcase.

I think the "Deal or No Deal" situation is more an example of emotional bias that leads to suboptimal results.

59 posted on 11/28/2007 10:50:15 AM PST by Publius Valerius
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