In Progress

I am defining irrational preferences to be preferences based on a utility function that includes not just one’s own consumptions of goods and experiences, but also the goods and experiences of others or the utility of others.

Of course this definition does not make sense. There is nothing irrational about caring about someone else. This is simply the definition implied by the way economists use the term “rational.”

check out Steve Keen

a study of economic and non economics students in 1993 by Frank, Gilovich and Regan found that most people learn to be more co-operative as they get older – but that learning economics slows this process of social maturity. Blog

 A recent study by the University of St Gallen asked 28 professional traders in financial instruments and a group of psychopaths in a Swiss gaol to undertake a computer simulation to test how much each group was prepared to co-operate, how egotistical they were and what kind of risks they were prepared to take. The result exceeded the expectation of Thomas Noll, a Forensic Scientist and Director of a Swiss gaol near Zurick. “Naturally we cannot describe the traders as mentally ill, but they behave in a more egotistical way and take greater risks than a group of psychopaths that took the same test”.
The traders did not actually make more profit than the comparison group – but what Noll found particularly shocking was that instead of working methodically and soberly in order to make the highest profit “the thing that mattered above all else to the traders was to get more than those that they were playing against and they used a lot of energy to damage these others”. Noll described this as if one had a neighbour that had the same kind of car and one comes out better by using a baseball bat on it. (my translation from “Aktienhaendler aehneln Psychopathen” in Der Spiegel 39/26.9.2011 or at http://www.spiegel.de/wirtschaft/unternehmen/0,1518,788232,00.html )