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- Verified Buyer
Professor Gilboa says in the Introduction, "The purpose of this book is to introduce readers to some of the fundamental insights of rational choice theory, drawing upon the formal theories of microeconomics, decision, games, and social choice as well as upon ideas developed in philosophy, psychology, and sociology. I believe that economic theory and its fellow disciplines have provided a remarkable collection of powerful models and general insights, which change the way we think about everyday life. At the same time, economics has been justifiably criticized on several grounds. First economics is a mathematically oriented field that in many situations fails to provide accurate numerical predictions as do the exact sciences. Second, the basic assumptions of economics have come under attack and have been shown to falsifiable in experimental studies. Finally, economics is often criticized for failing to deal with important and deep issues such as happiness and well-being, justice and fairness. Moreover, the scientific or pseudo-scientific approach to economics has been argued to be serving the rhetoric of capitalism in a way that may be detrimental to well-being and to justice. The focus of this book is on some basic insights that survive these critiques." The books contents are as follows:I. Optimization: 1. Feasibility and Desirability, 2. Utility Maximization, 3. Constrained OptimizationII. Risk and Uncertainty: 4. Expected Utility, 5. Probability and StatisticsIII. Group Choices: 6. Aggregation of Preferences, 7. Games and Equilibria, 8. Free MarketsIV. Rationality and Emotions: 9. Evolutionary View of Emotions, 10. Utility and Well-BeingI came to this book after having read many books in the inter-related areas of logic, economics, game theory, decision making, consciousness, etc. (e.g.: Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions, Freakonomics: A Rogue Economist Explores the Hidden Side of Everything (P.S.), Thinking, Fast and Slow, SuperCooperators: Altruism, Evolution, and Why We Need Each Other to Succeed, The Fair Society: The Science of Human Nature and the Pursuit of Social Justice, Being Logical: A Guide to Good Thinking, Your Brain Is (Almost) Perfect: How We Make Decisions, The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom.). I really enjoyed this book for several reasons, but primarily because of Professor Gilboa's definition of "rationality." He states, "I have a personal preference for a different [from the normal view of rationality as defined by economists] definition of rationality, which is much more subjective. According to this definition, a mode of behavior is rational for a given person if this person feels comfortable with it, and is not embarrassed by it, even when it is analyzed for him... The reason I like this peculiar definition of rationality is that I find it useful. An irrational mode of behavior is one that I can hope to change by talking to the decision maker, by explaining the theory to him, and so forth. A rational mode of behavior is one that is likely to remain in the data despite my teaching and preaching. I prefer to think of rationality as a notion of stability, or coherence of the decision with the decision maker's personal standards, rather than as a medal of honor bestowed upon certain decision makers by decision theorists." Amen.Furthermore, I found the inclusion of the section entitled, "Rationality and Emotions" very helpful. Here Gilboa says, "To conclude, we do not seem to have good measures of happiness. Moreover, it is far from obvious that "we know it when we see it." By contrast, we have a much better idea of what misery is. One possible conclusion, in line with the position of John Rawls, is that social policies should focus on the minimization of misery rather than on the maximization of happiness." Lastly, Gilboa states that, "The rational choice paradigm provides a way of thinking about the world, but it does not provide answers to a multitude of concrete questions. Throughout this book we have encountered questions that arise in the social sciences and that lead us to traditional questions in philosophy. Problems that range from the definition of probability to the meaning of happiness, from the notion of rationality to essence of justice, belong to the realm of philosophy, but they pop up in practical guises in questions of the social sciences. Most of these philosophical questions do not have objective or scientific answers. Correspondingly, many practical problems in the social sciences cannot be settled based on scientific enquiry alone, and therefore they cannot be relegated to experts. Rather, these questions should be tackled by each and every individual. I believe that the rational choice paradigm can be a powerful aid in thinking about such problems." I highly recommend this book.
