[The Logic of Life] Rationality is not always Intelligence

Disclaimer: This is my attempt to read The Logic of Life: The Rational Economics of an Irrational world, I am but an interpreter of these ideas.

John Kagel and Raymon Batalio were trying to figure out the degree to which animals exhibit intelligence. To prepare for the main experiment, they put lab rats into boxes that contain vending machines that serve different drinks and each has its own lever. The purpose is to get the rats to learn that within that particular setting they have the tools to satisfy their own thirst.

Then for the main experiment, they put rats into boxes that have a vending machine with two levers, each producing a different kind of beverage. One produces root beer – a drink that lab rats enjoy fairly delightfully, and one produces tonic water whose sour taste would displease the furry things.

For each session, the lab rats are given only a number of lever pushes, this can be called the budget, and each lever push releases a different amount of drink – the relative prices of your choices. These are the two variables that the experimenters control to observe the responses of the rats.

Now place yourself into that situation. You are thirsty as hell, then you see the only vending machine in this area you’re wandering. One lever produces something you like, but in less quantity, and one lever produces a drink that you dislike but in larger quantity. Of course, there’s a sign saying exactly how many lever pushes you can have a day. You’d have to come back the next day to this place to get water, because such apocalyptic setting is convenient. You will just most likely opt to satisfy your thirst with the disgusting tonic water, but also enjoy some of the fine root beer.

Now, suddenly the amount of tonic water, that thing you dislike, decreases ? In this case, you are responding to both your budget – the total number of level pushes you have, and the prices – the quantity of each type of liquid. The total consumption of liquid is essential to your survival, therefore you’d have to maximize for that objective, even at the cost of disregarding your own preferences. Since you still have the same number of lever pushes, it means that you would choose to press more for tonic water to achieve more overall liquid consumption.

This is perhaps the most concrete proof that Giffen Goods exist.

In economics and consumer theory, a Giffen good is a product that people consume more of as the price rises and vice versa—violating the basic law of demand in microeconomics


And rats instinctively grasp this, as that was their exact responses. The point here is that, rationality is not necessarily equivalent to intelligence. Evolution seems to be favor rationality, or perhaps more precisely, rationality seems to be the natural problem solving method.

You make unconscious rational decisions all the time. Therefore the next time you make decisions that you later on regret, you’d better off thinking about the objectives you were maximizing. Chances are you would realize that your actions were rational with respect to accomplishing the things that you unconsciously wanted. That would yield better insights about your behaviors, rather than regrets or bitterness.

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