Is it irrational to take a risk?

1

When person A says to person B, "You're being irrational," is it fair for person A to mean the following?

What you are doing is a bad choice! I know because your alternative is 75% likely to be good for you, whereas your selection is only 25% likely to be good for you!

I see that "being irrational" has a synonym with "being illogical", and this is only slightly related to a selection of preferable probabilities.

elliot svensson

Posted 2018-04-09T18:28:16.367

Reputation: 4 000

So is it fair for Person A to say Person B is making an irrational choice, if the subject is probabilities? – elliot svensson – 2018-04-09T18:59:22.293

"Being irrational" stands more like "act far from optimal", doesn't this sound more appropriate? Also "good for you" is dependent on person's values. And not only the probability of "good for you" but also the quantity is relevant. – rus9384 – 2018-04-09T20:33:46.680

Definitions of terms are off-topic on this SE. "Irrational" and "illogical" are only synonyms when taken in the colloquial sense, your issue may be in interpreting "illogical" in some more precise sense, like formal logic. Cost/benefit analyses, including probabilities, are part of informal logic and argumentation, broadly understood. – Conifold – 2018-04-09T20:59:31.947

IMO, the question is somewhat loaded. In my experience, people don't use the term "risk" objectively; choices are more likely to be called risky because the speaker thinks its irrational. – None – 2018-04-09T21:15:44.650

There are many ways to understand 'rational'. Do you mean 'is it prudent' or 'is it defensible within some formal system of logic'? – JeffUK – 2018-04-09T23:24:53.903

Answers

3

With the information we have, what A says ("You're being irrational") is nonsense. If all we know is that the probability is 25% that doing X is good for me, and 75% that it is bad, we cannot say based on this alone whether doing X is a good idea.

Let's have a bet: I bet that I can throw heads with a coin twice in a row. If I fail, I'll give you a dollar. If I succeed, you give me hundred dollars. I'll play that game all day. I'll lose 75% of the time but will leave with lots of cash. On the other hand, if you only pay two dollars if I succeed, then it's a bad idea for me.

So A's argument is quite bad: The likelihood of winning and losing is irrelevant if we don't take the amount gained and lost into account.

There's another problem with A's statement: B might accept a wager because B is bad at math and calculates the odds of winning wrongly. That doesn't mean B is irrational. Making the wrong decision because of a math error is foolish, but not because of irrationality.

gnasher729

Posted 2018-04-09T18:28:16.367

Reputation: 3 297

2

Rationale is developed via our subjective collection of causes and effects over the course of our lifetime. If someone suspects based on their experience that what we are doing will be negative, it is possible they will claim you are being irrational. This may be due to a lack of empathy, as there is a tendency for people to assume that others should have the same conclusions as they do, despite no two people living identical lives, and so each drawing their own conclusions about what is a risk and what is not.

The same would apply to being illogical, and when this is stated it is common for the person being criticized to explain why - to them - it is entirely logical. The question of whose logic is correct is a tricky one, as even the most logical and intelligent person in the world may not have the correct set of data to reach a more optimal conclusion than the least intelligent person, who happens to have experienced something which massively increases the odds of their conclusion being optimal.

Person A likely does mean that they believe A has a 75% chance for success, whilst B has only a 25% chance for success, but this is not knowledge, it is prediction, and that is notoriously subjective.

To answer the question in the title - it depends on the value placed on the results of the risk, and the consequences of things going badly. A rational risk can be taken, if the potential positives outweigh the potential negatives, but that is down to the individual - it's also entirely possible to take irrational risks.

Callum Bradbury

Posted 2018-04-09T18:28:16.367

Reputation: 257

1

Sorry, to give an answer anchored less in math or philosophy than in cognitive behavioral therapy. But in this case, it is the only relevant model that makes any sense in my opinion.

First of all, subjective measures of probability are generally horrible, and Person A's are likely to be absolute nonsense. So this form of argument in terms of absolute probability is seldom meaningful. But let's put that aside and assume this is not just arrogance.

Second, even a totally statistical application of the concept of risk is in terms of expected value, not mere probability. So you are leaving out the rate of return. People can very rationally choose a high risk for a high return. And the value of a return is always subjective, even when it is monetized (a single $1000 return means a lot to a broke person the day before rent is due, where a $2000 return five days later might have much lower value. Winning $5 off your worst enemy may be many times as satisfying as winning $500 off someone you have never met....)

It is clearly fair for Person A to disagree with Person B's subjective sense of probability or rate-of-return, especially if there are objective factors driving them that are clearly not being taken into account by Person B.

It is also possible that Person A can observe habits of thought in Person B that distort their sense of probability and subjective rates of return, and cause them to make decisions about risks that Person B themselves are likely to disagree with later.

But in an absolute sense, no, Person A cannot know that Person B is being irrational. He never has all the facts necessary, because payoffs are complex to the point of being paradoxical, and probabilities are influenced by very subtle details.

user9166

Posted 2018-04-09T18:28:16.367

Reputation:

1

Your argument might be true in some cases.

Here you considered 2 persons only. We all know that decision of good and bad are not made by 2 or 3 persons in almost all cases. By analyzing the immediate results also one can't say whether an action is good or bad for a particular person.

We can say the probability of getting Head or Tail of a coin very easily. But all actions are not as accurate as this. We can't give great importance to probability in most of our life situations.

E.g.: B is going to apply for a job to C. But A discourages him since C is supposed to be a rude fellow. Some heart-touching words of B led to a positive result. Here what would you say about the use of probability?

So, your argument cannot be taken as a general truth. Some unseen parameters may change the scenario completely.

Now, your main question:

Is it irrational to take a risk?

You could ask the following questions to yourself...(as a support to my answer.)

"Sometimes the result of a risk can satisfy the doer and others. If so, is it irrational?"

Similarly, "the result of an inaction can make the 'doer' and others sad. Is it rational?"

SonOfThought

Posted 2018-04-09T18:28:16.367

Reputation: 2 594

0

If you consider a well-studied, common, moderate risk--say, driving a car to a visit a different location, or having a cigarette to relieve stress, you will find that risk and rationality are both (unfortunately) subjective. So the answer is, "Perhaps."

I think, perhaps for every action you will encounter, you can find examples where the action was weighed differently on the graph of rationality vs. risk by different people. What that means is a question for sociologists, probably.

Because questions of risk and rationality nominally create forms of economic and sociopolitical order, I think a better question may be, "What is considered irrational? What are the risks associated with rational and irrational action? How do I analyze these risks? Are the risks actually connected to the action, or is this illusory?" That last question was much pondered by both Aristotle and physicists concerned with causality.

user30980

Posted 2018-04-09T18:28:16.367

Reputation: