Sunday, February 19, 2012

Lie Your Heart Out


Is it rational to be honest if you know you'll get into trouble? From the point of view of behavioural economics, there are three types of people: rational (they make an action choice in the first time period and stick to it), quasi-hyperbolic naive (they change their mind when the time comes to act on their choices) and quasi-hyperbolic sophisticated (they know that they are unlikely to stick to their original choice so they make arrangements to prevent themselves from deviating from the chosen strategy). 

I'm given to understand that rationalists are nasty, lying reprobates who act entirely in self-interest. I suppose they will lie every chance they get. Never trust a true rationalist. The quasi-hyperbolic sophisticated person wants to lie but knows that there's a good chance that he will end up telling the truth so he will make arrangements to commit himself to lying, say, by extinguishing the truth, brainwashing himself, testing himself to see if he holds up under torture: the sophisticated guy is classic contract killer material. 

A quasi-hyperbolic naive person is a spineless, useless creature. Being naive, he will want to lie but helplessly blabber the truth when the time comes. He is clearly the most lovable one of the three. 

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