My guest today is Professor Douglas Kenrick from the department of psychology in Arizona State University. Prof Kenrick has published hundreds of papers in the field of human behavior and psychology, and is the author to a few very interesting books, such as Social Psychology, Sex, Murder and the meaning of Life.
In this episode, we discussed his most recent book: The Rational Animal: How Evolution Made Us Smarter Than We Think.
The subject of human being’s rationality can be dated back to at least 1700s, if not earlier. The founding father of modern economics, Adam Smith, once famously wrote that “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” Since then, economic man, a man who is consistent and self-interest oriented has become one of the fundamental assumptions in all economic analysis. In such a framework, we human beings are supposed to be calculative, emotionless and always logical, or, you can call it, rational.
In the last 30 years or so, however, the rational economic man assumption has been largely challenged. The behavioral economists, after showing countless experiments, argue that we human beings are actually not that rational as the traditional economists suggested. We show all kinds of heuristic bias, such as over confidence, loss aversion, availability bias, endowment effect, just to name a few. So in the eyes of a behavioral economist, we human beings are anything but rational. We tend to make all stupid mistakes, without knowing them ourselves.
In addition to the above, there is a third school of thought. This third camp argues that sometimes even if we appear to behave irrationally, actually if we dig it deeper, there are fundamental evolutionary reasons for us to behave that way.
Prof Kenrick and I discussed this third school of thought in more details in the episode. I hope you enjoy the conversation.
Wu Zhijian’s Evidentialist Show is about information sharing on evidence based research in subjects such as economics, business, and finance. Due to industry regulations, we will not discuss any of Woodsford’s products on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Woodsford Capital Management or its affiliates. If you have any questions or suggestions, please feel free to contact us. You can find our contact details on www.woodsfordcapital.com.
