Symbolic Systems 202:
The Rationality Debate
Winter Quarter, 2003-2004
Stanford University, 3 units
Wednesdays, 6:30-9:00 p.m. (please arrive promptly)
Location: 420-050 (Jordan Hall, outside entrance near math courtyard)
Instructor: Todd Davies (t-d-a-v-i-e-s-@-c-s-l-i-.-s-t-a-n-f-o-r-d-.-e-d-u, x3-4091)
Office hours: Tues, Weds., Thurs. 10:30-12:00 in 460-040C
Course website: www.stanford.edu/class/symbsys202
This course will explore evidence and
disciplines bearing on the general question of whether human
is, or should be called, "rational". The springboard for debate on
question was the incorporation of axiomatic probability and
theory into economic models of individual choice behavior, as a
way of modeling the self-interest maximizing homo economicus of classical
A critique of probability and utility theories as models of human behavior was developed beginning in the 1960s by cognitive psychologists, especially by Amos Tversky (d. 1996) and Daniel Kahneman, who developed the view that the human mind normally operates using heuristic and systematically biasing principles that cannot be reconciled with principles of rational choice and judgment. Related work done by Peter Wason, Philip Johnson-Laird, and Jonathan Evans indicated that people also employ heuristics in logical reasoning tasks that lead to systematic departures from logic.We will begin by reviewing experimentally-based critiques of logic, probability, and utility theory as models of human reasoning, judgment, and decision making, along with the counter-claims of those such as Leda Cosmides and John Tooby, Nick Chater and Mike Oaksford, Gerd Gigerenzer, and Duncan Luce, who defend the essential adaptiveness of human behavior. We will review the history of how discrepencies between most people's intuitions and the prescriptions of axiomatic theories led some theorists to conclude that people should, in the words of Paul Samuelson, "satisfy their preferences and let the axioms satisfy themselves" -- implying that it is the theories, and not widespread human intuitions, that violate rationality. Recently, some psychologists have argued that neither the theories nor the behavior of experimental subjects can be faulted, but that, instead, researchers who claim discrepencies between the two have misinterpreted what people are really doing in experiments. We will consider this perspective as well.
Week 1 (Jan. 7)
Overview of the course and introductions.
Week 2 (Jan. 14) - Logical reasoning: Main results with challenges from evolutionary psychologists and rational analysts
 Baron, J. (2000), "Logic" (chapter 4), Thinking
Deciding (Third Edition), Cambridge University Press, pp.
 Cosmides, L. & Tooby, J. (1992), "Cognitive Adaptations for Social Exchange," in Barkow, J.H., Cosmides, L., & Tooby, J. (Eds.), The Adapted Mind: Evolutionary Psychology and the Generation of Culture, Oxford University Press, 1992, pp. 163-225.
 Chater, N. & Oaksford, M. (1998), "Ten Years of the Rational Analysis of Cognition," Trends in Cognitive Sciences, 3(2):57-65 (pdf).
(discussion leader: Todd Davies)
& Kahneman, D. (1974), "Judgment Under Uncertainty:
and Biases," Science, 185:1124-1131 (requires Stanford
 Tversky, A. & Kahneman, D. (1983), "Extensional Versus Intuitive Reasoning: The Conjunction Fallacy in Probability Judgment," Psychological Review, 90(4):293-315.
(discussion leader: Alison Appling)
 Gigerenzer, G. (1991), "How to Make Cognitive
Illusions Disappear: Beyond `Heuristics and Biases'," in Stroebe,
& Hewstone, M. (eds.), European Review of Social
Volume 2, John Wiley & Sons, pp. 83-115.
 Kahneman, D. & Tversky, A. (1996), "On the Reality of Cognitive Illusions," Psychological Review, 103:582-591 (pdf, requires Stanford connection).
 Gigerenzer, G. (1996), "On Narrow Norms and Vague Heuristics: A Reply to Kahneman and Tversky (1996)," Psychological Review, 103:592-596 (pdf, requires Stanford connection).
(discussion leader: Nicholas Williams)
Week 4 (Jan. 28) - Statistical judgment II: The camps go in separate directions
& Koehler, D. (1994), "Support Theory: A Nonextensional
Representation of Subjective Probability," Psychological
101:547-567 (pdf, requires Stanford connection).
 Brenner, L.A., Koehler, D.J., & Rottenstreich, Y. (2002), "Remarks on Support Theory: Recent Advances and Future Directions," in Gilovich, T., Griffin, D., & Kahneman, D. (Eds.), Heuristics and Biases: The Psychology of Intuitive Judgment, Cambridge University Press, 2002, pp. 489-509.
(discussion leader: Michael Frank)
& Goldstein, D.G. (1996), "Reasoning the Fast and Frugal
Models of Bounded Rationality", Psychological
Review, 10:650-669 (pdf, requires Stanford connection).
 Chater, N., Oaksford, M., Nakisa, R. & Redington, M. (2003). "Fast, Frugal and Rational: How Rational Norms Explain Behavior," Organizational Behavior and Human Decision Processes, 90:63-86.
(discussion leader: Tiffany Chao)
Week 5 (Feb. 4) - Individual decision making I: Subjective expected utility versus prospect theory
 Savage, L.J. (1954), "Historical and
Comments on Utility" (section 5.6), The Foundations of
Dover Publications, 1972, pp. 91-104.
 Ellsberg, D. (1961), "Risk, Ambiguity, and the Savage Axioms," Quarterly Journal of Economics, 75:643-669 (requires Stanford connection).
 Raiffa, H. (1961), "Risk, Ambiguity, and the Savage Axioms: Comment," Quarterly Journal of Economics, 75:690-694 (requires Stanford connection).
(discussion leader: Ben Patton)
& Kahneman, D. (1981), "The Framing of Decisions and the
Psychology of Choice," Science, 211:453-458 (requires
 Tversky, A. & Kahneman, D. (1987), "Can Normative and Descriptive Analysis Be Reconciled?," Working Paper RR-4, Institute for Philosophy and Public Policy, University of Maryland.
(discussion leader: Katie Hotchkiss)
Week 6 (Feb. 11) - Individual decision making II: Rank-dependent linear utility versus cumulative prospect theory
 Luce, R.D. (1992), "Where Does Subjective
Expected Utility Fail Descriptively?," Journal of Risk and
(discussion leader: Christopher Cox)
 Tversky, A. & Kahneman, D. (1992),
"Advances in Prospect Theory: Cumulative Representation of
Uncertainty," Journal of Risk
 Camerer, C.F. (2000), "Prospect Theory in the Wild," in Kahneman, D. & Tversky, A. (eds.), Choices, Values, and Frames, Cambridge University Press, pp. 288-300 (pdf).
(discussion leader: A.J. Magnuson)
Week 7 (Feb. 18) - Interactive decision making I: cooperation and game theory
and replies (2003), "Cooperation, Psychological Game Theory, and
Limitations of Rationality in Social Interaction," Behavioral and Brain Sciences,
26:139-198 (pdf, requires Stanford connection).
(discussion leader: David Abecassis)
Week 8 (Feb. 25) - Interactive decision making II: fairness norms and social preferences
 Sen, A.K. (1976-77), "Rational Fools: A
Critique of the Behavioural Foundations of Economic Theory," Philosophy and Public Affairs,
 Miller, D.T. (1999), "The Norm of Self-Interest", American Psychologist, 54:1053-1060 (pdf).
 Henrich, J., Boyd, R., Bowles, S., Camerer, C., Fehr, E., Gintis, H.,& McElreath, R., (2001), "In Search of Homo Economicus: Behavioral Expermients in 15 Small-Scale Societies," American Economic Review, 91:73-79 (pdf).
(discussion leader: Eve Phillips)
 Arrow, K.J. (1967), "Values and Collective
Decision Making," in Laslett, P. & Runciman, W.G. (Eds.), Philosophy, Politics and Society,
Third Series, Blackwell, pp. 215-232.
 Davies, T. & Shah, R. (2004), "Intuitive Preference Aggregation: Tests of Independence and Consistency," revised after presentation at the 2003 Annual Meeting of the Public Choice Society, working paper.
(discussion leader: Danny Oppenheimer)
Week 9 (Mar. 3) - Hedonics and the brain
O'Donoghue, T., & Rabin, M. (2003), "Projection Bias in
Predicting Future Utility," The
Journal of Economics, 118:1209-1248 (pdf).
 Camerer, C., Loewenstein, G. & Prelec, D. (2003), "Neuroeconomics: How Neuroscience Can Inform Economics," working paper (pdf).
(discussion leader: Ben Newman)
Week 10 (Mar. 10) - "Experimental economics" versus "behavioral economics"
Smith, V.L. (2003), "Constructivist and Ecological Rationality
Economics," American Economic
 Kahneman, D. (2003), "Maps of Bounded Rationality: A Perspective on Intuitive Judgment and Choice," revision of Nobel Prize Lecture, working paper (pdf).
 Kahneman, D. (2003), "A Psychological Perspective on Economics," American Economic Review, 93:162-168.
(discussion leader: Ryan Ellis)
FORMAT AND REQUIREMENTS:
Each class session, after week 1, will typically
(a) about 90 minutes of discussion of that week's assigned
(b) 20-30 minutes of remarks by me in preparation for the next
reading. The preparatory remarks will provide additional
background material that is not in the readings.
The course is open to any student, unless we
size of 20 or more, in which case I may have to limit it. To
the most out of the course you should have taken a course
probability theory (e.g. Stat 116), and at least one course in
the following: (a) philosophy other than logic, and (b) psychology
linguistics. The course is intended for juniors, seniors, or
graduate students who are interested in the rationality debate.
Each student is required to help lead a discussion during one of the nine weeks of reading discussion (weeks 2-10). I will interject comments when I think they are appropriate, and will serve as an interlocutor along with other students in the class. Emphasis will be on participation by everyone over the course of the quarter. Please contact me if you would like help in preparing to lead a discussion.
The main written work required is (a) a 5-7 page
paper on a topic of your choice that is closely related to the
and (b) two short (1-2 pages each) commentaries, one on each of
sets of grouped articles (with no vertical space between them) in
list of readings.