An interesting article on the conditions we we have as opposed to the conditions we ought to have.
For more than five decades, Daniel Kahneman, a Nobel Laureate and
professor of psychology at Princeton, has been asking questions like
this and analyzing our answers. His disarmingly simple experiments have
profoundly changed the way we think about thinking. While philosophers,
economists, and social scientists had assumed for centuries that human
beings are rational agents—reason was our Promethean gift—Kahneman, the
late Amos Tversky, and others, including Shane Frederick (who developed
the bat-and-ball question), demonstrated that we’re not nearly as
rational as we like to believe.
When people face an uncertain situation, they
don’t carefully evaluate the information or look up relevant statistics. Instead, their decisions depend on a long list of mental shortcuts,
which often lead them to make foolish decisions. These shortcuts aren’t a faster way of doing the math; they’re a way of skipping the math
altogether. Asked about the bat and the ball, we forget our arithmetic
lessons and instead default to the answer that requires the least mental effort.
Read more: http://www.newyorker.com/online/blogs/frontal-cortex/2012/06/daniel-kahneman-bias-studies.html#ixzz2Fvs8rgI5
I am not sure these experiments prove anything at all about human rationality.
"When people face an uncertain situation" ....The future is always uncertain. Is
it rational or irrational to buy a lottery ticket. All math can tell you is that
it is highly unlikely that your ticket will be a winner. BUT no amount of math
or statistics or careful reasoning will tell you whethe your ticket is a winner.
Generally you can only know whether a decision is foolish or not after the after
the fact.
David Ramsay Steele has an article in Liberty (Sept. 1997) explaining why it's rational to buy a lottery ticket. As you state, the stats consist of only one aspect of multiple psychological factors determining a decision.
If the enjoyment of playing the lottery is worth the nominal cost of a ticket to an individual, who is Kahneman to say the enjoyment experienced is not rational?
Then what process determines your airline pilot's decisions? How much fuel should the plane have for the journey? Is it rational to carry any more than "necessary"?
The article makes the point that much of human decision making is non-rational.
e.g.Maybe it gives the pilot a thrill to know there is just enough fuel to make-it
...maybe.
Then there would be a rational process to determine whether the non-rational choices are functional.