Rational irrationality

The concept known as rational irrationality was popularized by economist Bryan Caplan in 2001 to reconcile the widespread existence of irrational behavior (particularly in the realms of religion and politics) with the assumption of rationality made by mainstream economics and game theory. The theory, along with its implications for democracy, was expanded upon by Caplan in his book The Myth of the Rational Voter.

The original purpose of the concept was to explain how (allegedly) detrimental policies could be implemented in a democracy, and unlike conventional public choice theory, Caplan posited that bad policies were selected by voters themselves. The theory has also been embraced by the ethical intuitionist philosopher Michael Huemer as an explanation for irrationality in politics. The theory has also been applied to explain religious belief.

Caplan posits that there are two types of rationality:

Rational irrationality describes a situation where it is instrumentally rational to be epistemically irrational.

Caplan argues that rational irrationality is more likely in situations where:

In the framework of neoclassical economics, Caplan posits that there is a demand for irrationality. A person's demand curve describes the amount of irrationality that the person is willing to tolerate at any given cost of irrationality. By the law of demand, the lower the cost of irrationality, the higher the demand for it. When the cost of error is effectively zero, a person's demand for irrationality is high.

Rational irrationality is not doublethink and does not state that the individual deliberately chooses to believe something he or she knows to be false. Rather, the theory is that when the costs of having erroneous beliefs are low, people relax their intellectual standards and allow themselves to be more easily influenced by fallacious reasoning, cognitive biases, and emotional appeals. In other words, people do not deliberately seek to believe false things but stop putting in the intellectual effort to be open to evidence that may contradict their beliefs.

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