New findings show differences between rational vs. reasonable decision making in economic games

Wednesday, January 22, 2020
by Marisa Benjamin

Wisdom science, an interdisciplinary field of studies that looks at sound judgment and decision making, suggests that people can be guided by rational or reasonable standards when making gaming decisions. How can we better understand the difference between rationality through studying behaviour in socially-oriented games?

Published in Science Advances (an internationally renowned open-access AAAS journal), GI faculty member Dr. Igor Grossmann and colleagues, Dr. Richard Eibach, Jacklyn Koyama, and Qaisar Sahi, present findings from a systematic attempt to compare and understand rationality and reasonableness.

Findings were collected in a variety of ways, including analyzing participant responses about definitions, expectations, and value judgments, analyzing text from Supreme Court Opinions, TV sitcoms and popular culture artifacts, and observing participant behaviour in economic games like (the Prisoner’s Dilemma and the Dictator Game).

Ultimately, the authors demonstrate that most people understand rational decisions as preference-maximizing, and reasonable decisions as balancing one’s preferences with social norms such as fairness. This insight has implications for the way people behave in economic games, as well as how they evaluate other players’ behaviour.

Instructing participants to behave rationally led to more selfish choices, while instructions to be reasonable led to fair choices. Additionally, instructing participants to expect rational or reasonable behaviour from game partners affected the way participants perceived the acceptability of others’ self-serving decisions.

According to the authors, people might justify their preference-maximizing choices based on their desire to be rational. The difference between rationality and reasonableness also helps to explain how people keep track of others’ trustworthiness in various contexts and hold others accountable for self-serving actions.

To explore how these findings generalize to other cultural and socioeconomic contexts, the authors partnered with colleagues in Pakistan to replicate the studies with participants from rural and urban Pakistan. Grossmann and colleagues found that the results were generally consistent with the original study with North American participants.

Using economic games as a research simulation, where players are challenged to make decisions that pit personal interests against social norms, provides a controlled environment for studying how humans evaluate decisions.  

The research of Grossmann and colleagues also shows that people would rather have a rational person represent their side in economic and social disputes, despite responding more favourably to a reasonable person representing the other side in such disputes.


Read the full article here, and read the University of Waterloo's article about the research on PhysOrg, here.