--- Robin Hanson <[EMAIL PROTECTED]> wrote: > irrationaly optimistic self-assesment?
It is true that many investors are overconfident of their abilities and wrongly think they can beat the averages. But why call this "irrational"? It seems to me that the concept of rationality makes sense when it is applied to human action, but it is not meaningful when applied to beliefs. Action is rational or not, based on the actor's knowledge. When people have false beliefs, why is this not just bad data? Clearly, emotions play a major role both in our beliefs and in our ends. Vanity may make one think one is smarter, more beautiful, and more humane than one really is. Again, why not just label these "false"? If false beliefs are irrational, then almost everything we do is irrational, and there is no economics. For example, most folks don't have a correct knowledge of nutrition; their food choices are thus based on ignorance. So do we throw out the theory of consumer behavior because it is mostly irrational? Fred Foldvary ===== [EMAIL PROTECTED]
