(Ir)Rational Choice On The Road

Rational Choice Theory is a useful idea as long as we don’t get too hung up on the word “rational.” Rational choice theorists use a slightly different concept that claims individuals seem to balance costs against benefits (the “rational” part) in order to make choices that maximize personal gain. The problem with this idea is that there’s a lot of human noise in the system.

For example, consider this joke:

Q: What’s a redneck’s last words?

A: “Watch this!”

And, obviously, we imagine something having to do with large amounts of beer, pickup trucks, and stunts — perhaps involving deep ditches or steep hills.

In order for the joke to be funny, people of the sort we call rednecks must make certain choices we might call irrational (and associate with rednecks) that lead to certain outcomes that we might find hysterically funny but not what the redneck intended. One merely has to spend a few minutes on this web site to be cured of the idea that rational choice is a smoothly-operating human behavior.

For example:

OK, it’s time to get at the point of this post which is to highlight this article from InTransition magazine: Travelers Behaving Badly: Behavioral Economics Offers Insights and Strategies for Improving Transportation. The upshot: People make all kinds of awful decisions while driving, and these awful decision are predictable. So much for the “rational” (conventional understanding) in rational choice.

This part is scary:

One set of experiments finds that we are irrationally optimistic about our abilities in many situations. Asked to predict their grades in a class at the beginning of the semester, students invariably overrate their performance, with the class skewed towards high achievers. Similarly most drivers in repeated studies rate their skills as better than average (sometimes referred to as the “Lake Woebegone Effect,” after radio personality Garrison Keillor’s fictional hometown “where all the children are above average”).

This can plausibly account for much of the risky and boneheaded behavior on roadways—for instance driving while talking on a cell phone. Drivers think they can beat the odds.  They feel, “It’s the other person’s behavior that needs to be controlled, not mine,” Tom Vanderbilt noted in his bestselling book Traffic.

The article talks about the concept of “nudges” as a way to alter behavior. This photo of traffic decals is a good example of a nudge that works on the level of “automatic behavior.” The 3-D representation sure looks like these things are popping out of the road. I would slow down.

This is fascinating:

The approach is called “libertarian paternalism”—using nudges to guide people to make better choices, while still leaving them free to decide on their own, even to make bad choices. Balz said “one of the key pieces is retaining the libertarian side”—that is, providing “an easy option for someone to go another route” if they want.

Heaven forbid the nanny state should tell us how to drive and properly penalize us when we don’t. Our freedom (irresponsibly understood and practiced) is easily worth 40,000 lives per year, baby!

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Comments 4

  1. A.J. wrote:

    Enjoyed the article. It’s so easy to point out irrationality and hubris in people which makes me wonder why the Free Market people keep chiming their underlying assumption that consumers are rational decision makers.

    I also wonder what effect on drivers those Accident Statistic Signs (Grand and Kansas is one) have on saftey. I mean other than the danger of distracting a driver.

    Posted 27 Jul 2010 at 12:42 pm
  2. Ole wrote:

    Andy – reading this story in my RSS reader, all I could think about was “I’ve got to show Andy this, he’s going to love it” :)

    Posted 27 Jul 2010 at 1:25 pm
  3. Steve A wrote:

    Have you read Vanderbilt’s “Traffic?”

    Posted 27 Jul 2010 at 5:46 pm
  4. Andy Cline wrote:

    Steve… Yes. I call it “required reading for all humans” :-)

    Posted 27 Jul 2010 at 5:49 pm