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Infonomics

Criticism of “the rational choice model”

& Course summary

U. MatzatSociologie / HTI

School of Innovation ScienceTU/e

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Summary:Theory construction in the social sciences

Theory as instrument for explanation of societal (‘macro’) problems

PTR cycle Theory: regularity + proposition(s) about additional

condition(s) Problems of IS and Web Science as old wine in new bottles:

general theory important in sociology: 3 fundamental problems Much verbal theory development Use the Coleman boat

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Macro questions and micro solutions

Social conditions Social phenomena

Which actors?

Which goals/preferences?

Leads to what individual behavior?

bridge gap between macro and micro= opportunities and constraints of actors?

How to transform the individual uitcomes to collective outcomes?

the Coleman boat

Behavioral theory

Example: rational choice (L&M, Ultee, Coleman)

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Criticism against the “rational model”criticism: humans aren’t so rational

Counter arguments against this criticism:

You may hope that the optimizing behaivor of individuals evolved over time– even if did not consciously choose (market behavior?!).

The predictions are quite good, anyhow.

Humans may not be completely rational, but nevertheless the rational choice model provides a useful baseline for elaboration (“if we arrange institutions for rational egoists, then they will work for altruists as well”)

If you assume that humans are not rational, what else can we assume about human behavior?

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Macro questions and micro solutions

Social conditions Social phenomena

Which actors?

Which goals/preferences?

Leads to what individual behavior?

bridge gap between macro and micro= opportunities and constraints of actors?

How to transform the individual uitcomes to collective outcomes?

the Coleman boat

Behavioral theory

model of man (theory)?

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which “model of man” in social science theories?

In many cases: a model with behavior as rational choice is sufficient.

If the rational choice model turns out to be insufficient (your predictions out of the model are wrong): first consider modelling the effects of the social conditions on the individual level (bridge assumptions) in another way.

If that doesn’t work either, then adapt the assumptions about human behavior: assume that humans are rational, but in a simpler way (e.g., humans look at other actors and copy their successful behavior).

If that does not work, then assume that humans are irrational, but assume that they all are irrational in the same way.

NB: for the last point you have to know when and how humans typically (=in consistent ways) deviate from the rational choice model

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Deviations from rational choice - 1Prospect Theory (Kahneman & Tversky) What do you prefer? 

A 300B 400 with a chance of 75% (else 0)

  What do you prefer? 

C 300 lossD 400 loss with a chance of 75% (else 0)

 Most people: rather A than B, but… rather D than C. Humans are risk avoiding for gains, but risk searching for

losses!

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Deviations from rational choice - 2 Framing (Kahneman & Tversky) 

There will be a breakout of a disease which in all likelihood will kill (about) 600 people. There are two possible plans to react.

   A 200 people will be saved  B a chance of 1/3 that 600 people will be saved, and a

chance of 2/3 that nobody will be saved.  = = = = = = = = = = = = = = = = = = = = = = = = = =

same, but now with the following plans for reactions: 

C 400 will die for sure  D a chance of 1/3 that nobody will die, and a chance of

2/3 that 600 people will die  

[72% prefers A] [22% prefers C]

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Deviations from rational choice - 3

The conjunction effectMark is 34 years old. He is intelligent, but rather not spontaneous, he behaves somewhat constrained. At school, he was a good pupil in the beta-disciplines, but weaker in the humanities. He has just a few friends and communicates rather stiff.

What is more likely? Mark ...1 is medical doctor and loves playing poker2 is architect3 is programmer4 loves Star Wars5 does white-water rafting as hobby6 is a journalist7 is programmer and loves Star Wars8 loves climbing

•(most choose 7 or 3 and 4 as more likley)

•The conjunction effect: a and b is considered as more likely than only b or only a

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Deviations from rational choice - 4Base-rate fallacy (likelihood estimation independent of base

rate)

2% (=base rate) of the people suffer from disease Z. If you suffer from disease Z, then a test provides a positive result with a chance of 90%. If you do not suffer from disease Z, then the test leads to a positive outcome with a chance of 5%. You are tested; the result is positive. What is the likelihood that you suffer from disease Z?

Test pos. Test neg.sick 18 2 20Not sick 49 931 980

thus: if your test result is positive, then the likelihood of suffering from Z is18 / (18 + 49) = 27%

NB The 2% and the 5% determine the result strongly!

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Base rate neglect - continuation

Confusion of likelihhod(A|B) with likelihood (B|A)

example: a murder has been committed. The only evidence is DNA, found at the place of murder. The test shows a match with your own DNA. The likelihood that somebody else has a match with the DNA material is 1 out of 100.000. What is the likelihood that you are the murderer?

Imagine: the murder has been conducted in Eindhoven (700.000 inhabitants). They all could be the murderer. Seven inhabitants have a ‘match’ with the DNA material. The likelihhod that you have committed the murder is therefore not larger than 1 out of 7. If there is no other evidence, then you cannot be sentenced.

permutation: likelihood (DNA match | you’re the murderer)

likelihood (you’re the murderer | DNA match)

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Deviations from rational choice - 5 The Wason selection task (cause and effect)

Hypothesis: if you suffer from paranoia then you draw faces with over proportionately large eyes

There are cards with the diagnosis (“paranoia” or “no paranoia”) on the one side of the cards, and on the other side a drawing of a face, made by the patient.

There are four cards with the upper side visible: paranoia (or no paranoia) and at the back side: large eyes (or: no large eyes).

A a card with “paranoia” displayedB a card with “no paranoia: normal”C a card with a face with large eyesD a card with a face with normal eyes

question: which cards do you have to turn to test the hypothesis?

Result: people choose A, sometimes C, sometimes B, seldomly D.Iha: people look for confirming evidence.

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Deviations from rational choice– 6

Overconfidence (Fischhoff, Slovic, Lichtenstein, 1977)

Test: Kind of Trivial Pursuit questions; in addition to the answer the respondent announces how sure she is about the answer

in general: too much confidence on once own abilities

“debiasing” is almost impossible

Overconfidence is stronger for individuals with knowlege about the topic!

STOP

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Deviations from rational choice - 7

Anchoring

Move the roulette, look at where the bullet stops, and read the number aloud.

Ask the respondent (for instance): how many African nations are there in the United Nations?

The higher the random roulette number, the higher the answers (!).

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Conclusion: Deviations from rational choice

If you want to model a process/ a situation: stay away from deviations from the rational choice model as long as possible

If you decide to model deviations from the rational choice model: use well-known deviations (see examples of today).

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Macro questions and micro solutions

Social conditions Social phenomena

Which actors?

Which goals/preferences?

Leads to what individual behavior?

bridge gap between macro and micro= opportunities and constraints of actors?

How to transform the individual uitcomes to collective outcomes?

the Coleman boat

Behavioral theory

model of man (theory)!

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The “model of man” in social science theories

• often: a theory that considers human action as rational choice is sufficient.

• If the rational choice model turns out to be insufficient (your predictions out of the model are wrong): first consider modelling the effects of the social conditions on the individual level (bridge assumptions) in another way.

• If that doesn’t work either, then adapt the assumptions about human behavior: assume that humans are rational, but in a simpler way (e.g., humans look at other actors and copy their successful behavior).

• If that does not work, then assume that humans are irrational, but assume that they all are irrational in the same way.

NB: for the last point you have to know when and how humans typically (=in consistent ways) deviate from the rational choice model

Infonomics 0A416

Macro questions and micro solutions

Social conditions Social phenomena

Which actors?

Which goals/preferences?

Leads to what individual behavior?

bridge gap between macro and micro= opportunities and constraints of actors?

How to transform the individual uitcomes to collective outcomes?

the Coleman boat

Behavioral theory

model of man (theory)!

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Summary

„tools“ for making sense out of sociology articles

PTR cycle for summarizing several articles Coleman boat for reconstruction of single article

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Summary

Insights (I)

Problems of IS and web science as old wine in new bottles

3 fundamental problems Several theories Rational choice theory as general theory People are not always rational, but…..

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Summary

Insights (II) about social media / ICT

Theories about outcomes of ICT use Theories about the design and implemention of

social media Macro-micro link: use behavioral theories

(micro) to explain the (macro) effects of technological characteristics

Often: "One size does not fit all!“ Stated differently: the outcomes of a design

decision depend on the social context (see Coleman boat, assignment 2)

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And now something completely different.....

Exam soc part (90 min)

Final grade 0a416 exam: the mean of soc +& eco Final grade 0a416: 0.6 x grade_tentamen + 0.2 x OGO_assingments_soc +

0.2 OGO_assignment_eco

grade 0AP21: 0.6 x grade_tentamen + 0.2 x OGO_assignments_soc +

0.2 OGO_extra_assignment_soc

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Exam sociology

2 types of questions

1. Multiple choice 2. Open questions

No book/notes/slides allowed

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Multiple choice questions (1)

Which of the following items is in modern western societies no example of a collective good? Choose one answer.

  a) group assignments b) clean environment c) cars d) an online discussion in an open internet forum

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Multiple choice questions (2)

Which conclusion does Hobbes draw out of his analysis of human nature? Choose one anwer.

a. A pieceful society is impossible without a strong state. b. Endogenous cooperation between humans is possible.c. Repeated interaction facilitates reciprocity.

d. A strong state is dangerous for the citizens’ freedom.

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Open questions (1)

Explain how Emile Durkheim broadened the question about social order.

Which propositions does the core of the general historic materialism include?

Explain in detail the P-T-R cycle.

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Open questions (2)

What is the difference between individual and collective goods?

Provide an example of a descriptive question and an explanatory question for the following problems of sociology with respect to aspects of ICT: 1. inequality and 2. cohesion.

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Exercise exam sociology....

...shortly before the exam

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And now....?

What do you want to know for the exam?

What did you not yet completely understand?