Or, my attempt to justify another glass of wine…
Present-me is often annoyed at past-me for drinking too much, eating too much or not exercising enough. Does that mean engaging in those behaviours was irrational?
I’m following an online course in Behavioural Economics, and one of lectures featured various academics answering the question:
‘Is irrationality damaging to welfare?’
A number of responses included arguments along these lines:
“Yes, people frequently engage in behaviours that they know are bad for them such as smoking, over-eating and over-spending; this demonstrates that irrationality damages their welfare.”
This is a common argument that frustrates me as it fails to take into account the cost of ‘virtuous’ behaviour and the utility of ‘non-virtuous’ behaviour. People eat unhealthy food because it’s delicious, drink because they enjoy the feeling of being tipsy, and avoid exercise because they have other things they’d rather do with their time! The real question to ask is:
Does the value present-me gets out of engaging in this behaviour outweigh the cost to my future self?
If the answer to this question is yes, it might be perfectly rational to engage in these behaviours! To take an extreme example, I might know that exercise is likely to extend my life, but if the amount of time I must spend exercising approaches the amount by which my life will get extended, is it really worth it?!
So why then, even when I’ve performed a diligent cost-benefit analysis, do I end up regretting past decisions?
A plausible explanation is that we under-value our future-selves. It’s rational to discount our future-selves by some amount; most people would take $99 today over $100 in a month. However, we might not take $20 today over $100 in a month; that would be too much of a discount.
While I’m considering whether to have another drink, I’m fully aware of the risk of a hangover, but if I discount my future-self too much I incorrectly skew the cost-benefit analysis in favour of getting another drink anyway. Alternatively, maybe I over-estimate the enjoyment one more drink will bring, similarly skewing the result.
Is this evidence of irrationality? Not necessarily, if you take into account the theory of ‘bounded rationality’. From Wikipedia:
Bounded rationality is the idea that in decision-making, rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make a decision.
Calculating the correct future-discount value or utility of the next drink is arguably subject to these limitations, so if we’ve given it our honest best guess, even if it turns out to be wrong, the decision was not necessarily irrational.
Having said all that, if your goal is to maximise your overall happiness/welfare/etc, it would be instrumentally rational to try and improve your ability to estimate all the relevant factors so that your cost-benefit analyses will generate better results.
- If you often find yourself regretting past decisions, it could be beneficial to put effort into improving your ability to estimate things like your future-discount factor (I am bad at this and working on it!)
- If you’re tempted to engage in supposedly non-virtuous behaviours, ask yourself if the utility to your present-self outweighs the cost to your (discounted) future-self. If it doesn’t, it’s probably best to hold off. If it does, it might be worth going ahead!