Consider Linda, a 31-year-old woman, single and bright. As a student, she was deeply concerned with discrimination and social justice and also participated in antinuclear protests. Which is more probable? (a) Linda is today a bank teller; (b) Linda is a bank teller and active in the feminist movement.
[Psychologists Daniel Kahneman and Amos Tversky determined] that most respondents picked "b," even though this was the narrower choice and hence the less likely one.
Shaywitz, the reviewer, says that Kahneman and colleagues have
reshap[ed] the study of economics by challenging the assumption that a person, when faced with a choice, can be counted on to make a rational decision.
I would argue that "b" is the rational decision. It shows us the respondent working with what he knows. We have given him a little information and he is working this information into an intelligent choice.
Except of course the economist will not accept a choice as intelligent unless it meets his narrow definition of the rational. For the economist, the rational choice is the broader choice. "A" is more likely because less constrained. From a better’s point of view, this is the right choice. But it is not, I submit, the more rational one. Because it forces the respondent to forget what he knows, to forgo the opportunity we have given him to make an "informed" choice.
We could do the ethnography here. If we asked the the respondent how he thought this problem through, he would give us an account of his "rationality." He would demonstrate that he satisfies the definition of the term according to Princeton Wordnet. It would be easy enough to show that he occupied "the state of having good sense and sound judgment."
Economics continues to insist on its notion of rationality when we know that this rationality is always embedded in a social context and a cultural one. Rationality is only sometimes about calculating odds. It’s also about working with a set of parameters and bodies of knowledge. Rationality is almost always profoundly social and culture event.
In the experiment reported in the WSJ, Kahneman was effectively asking the respondent to "forget what he knew" to make the rational choice. Funny how often economics seems to ask us to do the same.
Shaywitz, David A. 2008. Free to choose but often wrong. Wall Street Journal. June 24, 2008.