I should probably expand on this—it can make sense to have a mechanism or decision-making rule that’s inefficient or irrational for reasons of incentive compatibility, information or computational limits, or other practical constraints. That said, we should be very explicit about describing these as mechanisms, institutions, or collective decision rules and not as preferences. These are second-best tools for governance that lack basic properties you’d expect of human preferences. Actually, as Harsanyi proved back in the 1950s, the unique social choice function—up to affine transformations—which preserves individual rationality (i.e. really can be called a group’s “preferences”) is the utilitarian rule. For the same reason I’d reject calling this “geometric rationality” rather than one of the common names already used for this technique (e.g. the proportional-fair rule, Nash bargaining—or just geometric maximization for the whole family of methods).
If we’re not very clear when we describe this, it confuses the hell out of people who start to think these are alternative, contradictory formulations of rationality, and then use these arguments to reject VNM-rationality.
I should probably expand on this—it can make sense to have a mechanism or decision-making rule that’s inefficient or irrational for reasons of incentive compatibility, information or computational limits, or other practical constraints. That said, we should be very explicit about describing these as mechanisms, institutions, or collective decision rules and not as preferences. These are second-best tools for governance that lack basic properties you’d expect of human preferences. Actually, as Harsanyi proved back in the 1950s, the unique social choice function—up to affine transformations—which preserves individual rationality (i.e. really can be called a group’s “preferences”) is the utilitarian rule. For the same reason I’d reject calling this “geometric rationality” rather than one of the common names already used for this technique (e.g. the proportional-fair rule, Nash bargaining—or just geometric maximization for the whole family of methods).
If we’re not very clear when we describe this, it confuses the hell out of people who start to think these are alternative, contradictory formulations of rationality, and then use these arguments to reject VNM-rationality.