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play in human decision-making and behaviour.
At one level, these studies have shown that in the
business of our everyday lives, we rarely have
the time, let alone available information, neces-
sary to form rationalized decisions. But at a deeper
level, there is increasing recognition that what we
often refer to in derogatory terms as irrationality
(I prefer to us the term
more-than-rational
)
is actually a necessary and important part of
human behaviour. More-than-rational forms of
behaviours differ from rational action in important
ways. First, while rational action tends to require
relatively long periods of deliberation on possible
actions, more-than-rational behaviours often
involve on-the-spot decision-making. While we
are conscious of our rational actions, more-than-
rational decision-making often operates at a
subconscious level (akin to an automatic response
to a situation). Finally, while rationality is
associated with forms of objective calculation
(involving impartially weighing up available
options and assessing risks), more-than-rational
decision-making is often emotionally orientated
(being heavily influenced by how we feel about a
given situation). On these terms, irrational forms
of behaviour are now routinely used as a catchall
phrase to describe the emotional, automatic and
subconscious aspects of action (even if in reality
these modes of decision-making are often quite
independent: you can be very conscious of your
emotional response to a situation for example).
Irrational, or more-than-rational, decision-
making is a product of two sets of processes. First,
it derives from the limits, or bounds, that exist to
our ability to be rational (see Simon, 1945, 1957).
These limits relate to the fact that in the busi-
ness of everyday life, we neither have the time
nor inclination to act rationally in all of our
decision-making. It is for this reason that we often
use shortcuts in the decision-making process
(Kahneman et al, 1982). These shortcuts, which
can include following the decisions made by other
people, or simply the things that we have done
in the past, enable us to find a reason to act in a
certain way, but not a rational basis for deciding
Milton Friedman and being
Free To Choose
To find out more about the rationality
assumption and the principles of free
market thinking on which it is based, see
Milton Friedman's PBS series Free To
Choose. Milton Friedman was a Nobel
Prize-winning American economist. This
eight-part series is interesting not only
because it lays out the principles of free
market theories, but because each
episode concludes with a debate between
Friedman and critics of his idea. Go to:
v=f1Fj5tzuYBE
Table 8.1
Market-based policy options for
environmental behaviour change
Policy instrument
Policy example
Creation of market
Carbon trading/pollution
permits
Information provision
Green marketing/smart
energy meters
Tax/financial penalty
Carbon tax/pollution fines
Subsidy
Tax breaks for micro-
energy generation
schemes
8.4.2 Predictably irrational
environmental behaviours
Ongoing research in economics (and in partic-
ular in behavioural economics), behavioural
psychology and neuroscience has started to cast
serious doubts on the rationality assumptions
associated with homoeconomicus (see Damasio,
1995; Le Doux, 1996; Thaler and Sunstein, 2008;
Akerlof and Shiller, 2010). At the heart of these
various studies has been recognition of the
significant role that emotions and irrationality
