Reasonable bounds on rationality
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Reasonable bounds on rationality Igor Grossmann1 · Richard P. Eibach1 Received: 1 September 2019 / Accepted: 30 September 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract Previous theory and research on bounded rationality has emphasized how limited cognitive resources constrain people from making utility maximizing choices. This paper expands the concept of bounded rationality to consider how people’s rationality may be constrained by their internalization of a qualitatively distinct standard for sound judgment, which is commonly labeled reasonableness. In contrast to rationality, the standard of reasonableness provides guidance for making choices in situations that involve balancing incommensurable values and interests or reconciling conflicting points-of-view. We review recent evidence showing that laypeople readily recognize the distinctions between rationality and reasonableness and thus are able to utilize these as distinct standards to inform their everyday decision-making. The fact that people appear to have internalized rationality and reasonableness as distinct standards of sound judgment supports the notion that people’s pursuit of rationality may be bounded by their determination to also be reasonable. Keywords Reasonableness · Folk theories · Sound judgment · Wisdom · Lay beliefs · Culture
1 Introduction What does it mean to say that rationality is bounded? Most previous work emphasizes how cognitive processing limitations, time constraints, and imperfect information cause people to fall short of the standard of optimal, utility maximizing decision-making (Simon 1983). Theory and research on bounded rationality indicates that decision-makers use strategies such as satisficing to compensate for these limitations. Many important insights have been gained using this approach. However, there is another sense in which human rationality may be bounded that has been * Igor Grossmann [email protected] Richard P. Eibach [email protected] 1
University of Waterloo, 200 University Avenue West, Waterloo, ON N2L 3G1, Canada
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relatively overlooked. In this other sense of the term, rationality is bounded because it is not the sole standard of judgmental competence that people consult when they decide what they should do (Tetlock 2002). A judgment may be considered sound because it is rational, or it may be considered sound because it is reasonable. Are rationality and reasonableness not identical standards? We maintain that if people internalize rationality and reasonableness as distinct standards for evaluating the competence of judgment then the standard of reasonableness may place important constraints on people’s pursuit of rationality. Thus, people sometimes may fail to make a rational decision not because they are unable to identify the rational option, as most work in the bounded rationality tradition has emphasized, but because choosing the rational option would violate their standards of reasonableness. Though the di
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