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Marketers can take advantage of rational ignorance by increasing the complexity of a decision. If the difference in value between a quality product and a poor product is less than the cost to perform the research necessary to differentiate between them, then it is more rational for a consumer to just take his chances on whichever of the two is more convenient and available.
Rational irrationality is not doublethink and does not state that the individual deliberately chooses to believe something he or she knows to be false. Rather, the theory is that when the costs of having erroneous beliefs are low, people relax their intellectual standards and allow themselves to be more easily influenced by fallacious reasoning, cognitive biases, and emotional appeals.
There are four primary assumptions about human nature that form the foundation of RCT as a model of economic rationalization: 1). the decisions and subsequent behavior of an individual are inherently rational as a result of accurately and logically factoring both the rewards and costs of the proposed choice; 2). the reward will logically and ...
Imagine there's a game where one person is placed in a room and assigned the role of the "sender." A second person in a different room is assigned the role of "receiver." The sender is given $20 ...
Caplan refers to the make-work bias as a "tendency to underestimate the economic benefits from conserving labor." [1]: 40 Caplan claims that there is a tendency to equate economic growth with job creation. However, that is not necessarily true, since real economic growth is a product of increases in the productivity of labor.
Tactical irrationality gives rationally fought terrorism its strong effect. Beyond tactics, terrorism can even be understood as strategic irrationality. Furthermore, strategic irrationalism is an important basis for the development and exploitation of niches in the esoteric market as well as by sectarian religious communities.
Such “rational ignorance” incentivizes politicians to promote harmful-but-popular policies. The danger of ignorance isn’t just that it leads voters to choose the “wrong” candidate.
Predictably Irrational: The Hidden Forces That Shape Our Decisions is a 2008 book by Dan Ariely, in which he challenges readers' assumptions about making decisions based on rational thought. Ariely explains, "My goal, by the end of this book, is to help you fundamentally rethink what makes you and the people around you tick.