Comments on: The Trouble with Public Choice: Too Generous to Politicians

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By: Why Are Politicians Amoral Pimps? « Philosophy On The Mesa

Why Are Politicians Amoral Pimps? « Philosophy On The Mesa — Wed, 09 Sep 2009 06:05:15 +0000

[...] democracies have in solving problems. (for various responses to Matt’s query see here and here and Matt’s follow up [...]

By: Why Are Politicians Amoral Pimps? | Rants & Reasons

Why Are Politicians Amoral Pimps? | Rants & Reasons — Wed, 09 Sep 2009 04:26:22 +0000

[...] democracies have in solving problems. (for various responses to Matt’s query see here and here and Matt’s follow up [...]

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By: Eternal truths about those who are attracted to politics « Knowledge Problem

Fri, 28 Aug 2009 22:17:29 +0000

[...] processes such as lobbying and rent-seeking, could yield some insights. But Will Wilkinson’s foray into this discussion is not particularly sanguine; in fact, he contends that by treating politicians as rational agents, [...]

By: TGGP

TGGP — Fri, 28 Aug 2009 21:56:29 +0000

That it is possible to get stuck on a local maxima doesn't mean you are, so evolutionary explanations are not inherently dependent on bounded rationality.

Furthermore, bounded rationality can explain why one animal might BELIEVE a signal, but not why the mutation to send out the signal spread. The benefits for signalling must have exceeded the costs.

Hanson's theory is that it is more costly for the inexperienced to signal confidence than the experienced. The experienced learn how to signal credibly. Because they actually are more experienced, it is rational for observers to consider it credible.

By: Neel Krishnaswami

Neel Krishnaswami — Fri, 28 Aug 2009 19:39:40 +0000

Have you read much evolutionary theory? Animals evolve to give signals. If the costs of those signals exceeded the benefits, the mutations responsible would be weeded out.

Yes, I have. Evolutionary models describe a form of bounded rationality, not full rational choice -- for example, evolutionary processes can get stuck in local optima, whereas perfectly rational agents will not. That is, an evolutionary model is an explanation based on a deviation from rational choice.

If I DON'T signal overconfidence, that indicates that I probably have unusually low confidence. The experienced are more overconfident, so it is rational for observers to infer greater experience on the part of the more confident.

This is plausible, but actually establishing that this is a true explanation is very, very difficult. The problem is that this is not a stable solution concept -- you're assuming that the observer is rational, but the counterparty is not acting strategically.

Now, what happens if the counterparty decides to project confidence strategically? And what happens if the observer decides to take into account the possibility that the counterparty is acting strategically, and so on? If you treat the degree of mutual information as a parameter to the model, then the model can predict either that the signal is meaningful or that it's not meaningful, depending on the degree of common knowledge -- if you don't iterate, you get the solution you propose, and if you do, then you get the Nash equilibrium. In between, you get a transition depending on exactly how you've formulated the game.

This means that you need a method for measuring the degree of common knowledge before you can decide whether this is a true explanation or not. Without out, you have to remember that there's a word for models that can be tuned to predict anything, based on a hard-to-observe parameter with many plausible values: non-falsifiable.