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Rational Ignorance versus Rational Irrationality

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  • Caplan, Bryan

Abstract

The paper presents a model of "rational irrationality," to explain why political and religious beliefs are marked not only by low information (as the notion of rational ignorance highlights), but also by systematic bias and high certainty. Being irrational--i.e. deviating from rational expectations--is modeled as a normal good. The reason that irrationality in politics and religion is so pronounced is that the private repercussions of error are virtually nonexistent. The consumption of irrationality can be efficient, but it will usually not be when the private and the social cost of irrationality differ--for example, in elections. Copyright 2001 by WWZ and Helbing & Lichtenhahn Verlag AG

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Kyklos.

Volume (Year): 54 (2001)
Issue (Month): 1 ()
Pages: 3-26
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:bla:kyklos:v:54:y:2001:i:1:p:3-26

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Citations

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Cited by:
  1. Hirshleifer, David & Teoh, Siew Hong, 2009. "The Psychological Attraction Approach to Accounting and Disclosure Policy," MPRA Paper 14046, University Library of Munich, Germany.
  2. Bryan Caplan & Tyler Cowen, 2004. "Do We Underestimate the Benefits of Cultural Competition?," American Economic Review, American Economic Association, vol. 94(2), pages 402-407, May.
  3. Berg, Nathan & Kim, Jeong-Yoo, 2010. "Demand for Self Control: A model of Consumer Response to Programs and Products that Moderate Consumption," MPRA Paper 26593, University Library of Munich, Germany.
  4. Berg, Nathan & Eckel, Catherine & Johnson, Cathleen, 2010. "Inconsistency Pays?: Time-inconsistent subjects and EU violators earn more," MPRA Paper 26589, University Library of Munich, Germany.
  5. Bryan Caplan, 2002. "Systematically Biased Beliefs About Economics: Robust Evidence of Judgemental Anomalies from the Survey of Americans and Economists on the Economy," Economic Journal, Royal Economic Society, vol. 112(479), pages 433-458, April.
  6. Louis Jaeck, 2011. "Information and political failures: to what extent does rational ignorance explain irrational beliefs formation?," Constitutional Political Economy, Springer, vol. 22(3), pages 287-301, September.
  7. Bryan Caplan, 2006. "Terrorism: The relevance of the rational choice model," Public Choice, Springer, vol. 128(1), pages 91-107, July.
  8. Heinemann, Friedrich, 2004. "Explaining Reform Deadlocks," ZEW Discussion Papers 04-39, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  9. Pelikan, Pavel, 2008. "The government economic agenda in a society of unequally rational individuals," MPRA Paper 19127, University Library of Munich, Germany, revised 06 Dec 2009.
  10. Nathan Berg & Gerd Gigerenzer, 2007. "Psychology Implies Paternalism? Bounded Rationality may Reduce the Rationale to Regulate Risk-Taking," Social Choice and Welfare, Springer, vol. 28(2), pages 337-359, February.
  11. Daniel D’Amico, 2010. "Jesus Huerta de Soto, Book review of The Austrian school: Market order and entrepreneurial creativity," The Review of Austrian Economics, Springer, vol. 23(2), pages 193-198, June.
  12. Hirshleifer, David, 2007. "Psychological Bias as a Driver of Financial Regulation," MPRA Paper 5129, University Library of Munich, Germany.
  13. Michael Wohlgemuth, 2002. "Democracy and Opinion Falsification: Towards a New Austrian Political Economy," Constitutional Political Economy, Springer, vol. 13(3), pages 223-246, September.
  14. Hans Pitlik, 2004. "Institutionelle Voraussetzungen marktorientierter Reformen der Wirtschaftspolitik," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 240/2004, Department of Economics, University of Hohenheim, Germany.
  15. Tyler Cowen, 2005. "Self-deception as the root of political failure," Public Choice, Springer, vol. 124(3), pages 437-451, September.
  16. Michael Wohlgemuth, 2011. "Is there a Paradox of a Hayekian Paternalist?," Papers on Economics and Evolution 2011-22, Max Planck Institute of Economics, Evolutionary Economics Group.
  17. Filoso, Valerio, 2008. "Sulla domanda di economia irrazionale: Naomi Klein vs. Milton Friedman
    [On the Demand of Irrational Economics: Naomi Klein vs. Milton Friedman]    ," MPRA Paper 9452, University Library of Munich, Germany.
  18. Niklas Potrafke, 2006. "Parties Matter in Allocating Expenditures: Evidence from Germany," Discussion Papers of DIW Berlin 652, DIW Berlin, German Institute for Economic Research.
  19. Frijters, Paul & Barón, Juan D., 2010. "The Cult of Theoi: Economic Uncertainty and Religion," IZA Discussion Papers 4902, Institute for the Study of Labor (IZA).

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