We don't have a hundred biases, we have the wrong model

I would normally be skeptical of an article that starts with a description of epicycles because it probably means that whatever is going to be described next is totally bullshit.

In this case I’m not so sure. As a plebeian normie, it seems like the “rational actor” model of economics has a lot of problems.

Now I do believe that All people are All of the time trying to achieve their goals and meet their needs as can best be achieved in the given situation and in the way that they best know how.

But this includes a junkie digging through trash for things to sell, a housewife poisoning her abusive husband, and a schizophrenic blowing up mailboxes to stop an international plot against her. It includes a recent widower staying in bed for two weeks. It certainly includes your exclusion of an entire neighborhood and its thousands of inhabitants from your care due to some harrowing experiences.

As I understand it, most economists, and certainly the ones that influence policy, are not really thinking of these things as “rational”. To them rational means “increasing your own wealth or exchanging your money in the most efficient and expedient way possible”. And that’s very good because this is the way that corporations and rich people that hire people to manage their money effectively operate. But it doesn’t really work for normal people in normal situations. Our lack of information about our surroundings and our incredibly wide array of emotional states doesnt leave a lot of room for rationality.

I won’t really expound on it because this is already so long, but having a single definition of rationality also excludes any possibility of having an informed multicultural viewpoint.

People are rational, model works.

But you can not approximate complex system like human brain with couple of variables. There are not hundreds, but millions of biases.

Advanced epicycle models had dozens moving parts. JPL planetary ephemerides (modern equivalent in polynomials) have several millions of parameters and terabytes of equations.

If you apply the cognitive biases model to algorithms which have superhuman performance in various games - like AlphaZero, DeepBlue, Pluribus, and so on - the natural result is to conclude that these models are predictably irrational. The reason you get this conclusion is because it turns out to be necessary to trade off theoretical optimal answers for the sake of speed. The behavioral economic view of human irrationality ought to be considered kind of dumb in view of that result. But it is actually so much worse than that for the field, because the math shows that sacrificing optimality for speed would be something that even an infinitely fast computational intelligence would be forced to do. It isn't irrational; it is a fundamentally necessary tradeoff. In imperfect information games your strategy space is continuous, EV is a function of policy, and many games even have continuous action spaces. If you thought Go was high branching factor you thought wrong; Go is an example of a freakishly low branching factor. It is infinitely smaller than the branching factor in relatively trivial decision problems.

If you've never looked at cognitive biases through the lens of performance optimization you should try it. What seems like an arbitrary list from the bias perspective becomes clever approximative techniques in the performance optimization perspective.

I often think about why this isn't more commonly known among people who call themselves rationalists and tend to spend a lot of time discussing cognitive bias. They seem to be trending toward a belief that general superintelligence is of infinite power, doubling down on their fallacious and hubristic appreciation for the power of intelligence.

I say this, because when you apply the algorithms that don't have these biases - the behavioral economist view wouldn't find them to be irrational since they stick to the math, they follow things like the coherence principles for how we ought to work with probabilities as seen in works by Jayne, Finett, and so on - they either don't terminate, or, if you force them to do so... well... they lose to humans; even humans who aren't very good at the task.

40% of US believes the earth was created in the last 10,000 years. Any model relying on rationality has no chance here

Conspicuous consumption can be rational, or at least beneficial in the evolutionary sense.

If you are a lawyer with a good practice, you are expected to drive a nice large car. If you drove a battered old economy-class car, your clients might see it as a sign that something is wrong with you (there are several plausible ideas) and shun dealing with you. There go fat fees and investment savings.