On Rational Irrationality

A. Zaostrovtsev
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A. Zaostrovtsev: National Research University Higher School of Economics, Saint Petersburg, Russia

Journal of the New Economic Association, 2017, vol. 33, issue 1, 151-156

Abstract: The article reviews the theory of rational irrationality according to which people might retain irrational beliefs indefinitely if the material costs of error are minimal. Irrational beliefs mean systematic rather than random errors. Voters frequently vote according to their embedded prejudices because the private costs of their errors are equal to zero. Zero costs are the result of practically zero chance to be decisive voter: the single vote has no effect on the election outcome. In this case it is rational to receive psychological benefits from manifestation of beliefs taking any devastating decisions at the poll station. As a result political irrationality may be compared with environment pollution. In both cases, the private benefits of self-restraints are absent. The burden of welfare state in the West and massive support of counter-sanctions in Russia reveal voter's rational irrationality. For the welfare state vote and those for whom tax increase is expensive: in fact, each of the losers know that his personal choice in the voting does not affect the result. Instead they satisfy their sense of justice. The situation with the popular support of counter-sanctions in Russia is rather similar. Psychological benefits as the result of symbolic counter-sanctions support are clearly not zero in contrast to the costs of personal choice at the national elections where the weight of single vote means nothing, An analysis of voter behavior clearly shows that universal and unrestricted suffrage allows irrational beliefs of the masses to form an ineffective policy. From the standpoint of economic theory, it is equivalent to negative externalities.

Keywords: rational irrationality; decisive voter; prejudices; psychological benefits; welfare state; countersanctions (search for similar items in EconPapers)
JEL-codes: B40 B41 (search for similar items in EconPapers)
Date: 2017
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