Axiomatic and ecological rationality: choosing costs and benefits

1 INTRODUCTIONThis paper argues that the best approach to normative rationality for the specific purpose of fostering improvements is a strategic mixture of the two strongest contenders. The methods of each exploit particular kinds of information and attain some desiderata at the cost of others; combining them in a particular way results in a 'hybrid approach' that offers a better cost-benefit package than either alone.The battles of the so-called 'rationality wars' are as multifarious as they are passionate, with the diversity of goals, methods, and backgrounds of rationality researchers leaving every position open to attack from some alternative perspective. At least among well-developed research programs, we should not expect any of the competing paradigms to be unserviceable tout court, but rather better or worse for particular purposes and given particular tools. Each broad program will also have stronger and weaker subprograms. For these reasons, this paper considers competing general approaches to normative rationality, and evaluates them with respect to the specific purpose of guiding individual agents towards greater rationality.Specifically, I compare the axiomatic approach (hereafter 'AA') with ecological rationality (hereafter 'ER') (see, e.g., Gigerenzer and Selten 1999; Gigerenzer et al. 2011). Put simply, an AA practitioner defines rational behavior in terms of conformity to abstract axioms, while ER defines rationality in terms of the "match between mind and environment" (Gigerenzer et al. 2011, xix). More precisely, "[w]hen a decision procedure is well matched to an environment, where 'well matched' is defined as achieving good-enough levels on the performance metrics relevant to that environment, then the pair (decision procedure, environment) is classified as ecologically rational" (Berg 2014a, 378). AA is the methodology abstracted from existing axiomatic theories (ATs), such as AGM belief revision1 (Alchourron et al. 1985) and axiomatizations of rational choice; the use of axioms is the most salient characteristic of these theories, but they have additional common features that will prove important. In contrast, ER is a top-down research program that applies its abstract conception of rationality to multiple types of problems: Gigerenzer and Hertwig run interdisciplinary research centers at the Max Planck Institute with the basic purpose of developing ER (though not necessarily with a normative focus) and applying it to choice, inference, and other tasks.Important related research programs-such as Kahneman and Tversky's work on heuristics and biases (Kahneman and Tversky 1973; Tversky and Kahneman 1974; Kahneman 2011)-are not considered as independent candidate approaches because their role is to provide descriptive insights rather than new normative criteria. I also evaluate what I take to be the strongest versions of AA and ER. For one, this means de-emphasizing those sub-approaches that are most easily and successfully attacked and remaining agnostic among the defensible ones wherever possible. For this reason, AA is construed as seeking relatively simple behavioral tests of co herence, with emphasis on observability and minimality. In contrast, uses of axioms that appeal to literal process statements (e.g., "the agent maximizes expected utility") make much stronger claims that invite additional criticism (see, e.g., Simon 1956), and even if behavioral economics can be given a normative interpretation (cf., Grune-Yanoff 2010; Berg 2003) its complexity and proliferation of parameters compared to orthodox rational choice theory makes its normative usefulness highly questionable. Secondly, I consider the theoretical commitments of each approach and the best practices that could be carried out within them, rather than the details of existing practice. This means that I take most seriously ER's basic definitions of rationality-which focus on the degree of success to be expected from using a process, the need to evaluate actual choice and inference mechanisms, and the importance of speed, efficiency, and accuracyrather than the accompanying biological and anti-orthodox rhetoric (see Hands [2014] for a critical discussion of ER's normative prospects, including the work done by evolutionary and anti-orthodox arguments). …