What is Rational Irrationality? Compact Explanation

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The concept known as rational irrationality was popularized by economist Bryan Caplan in 2001 to reconcile the widespread existence of irrational behavior (particularly in the realms of religion and politics) with the assumption of rationality made by mainstream economics and game theory. The theory, along with its implications for democracy, was expanded upon by Caplan in his book The Myth of the Rational Voter.

The original purpose of the concept was to explain how (allegedly) detrimental policies could be implemented in a democracy, and, unlike conventional public choice theory, Caplan posited that bad policies were selected by voters themselves. The theory has also been embraced by the ethical intuitionist philosopher Michael Huemer as an explanation for irrationality in politics. The theory has also been applied to explain religious belief.

Part 1. Theory.

Part 1.1. Two types of rationality, and preferences over beliefs.

Caplan posits that there are two types of rationality:

Epistemic rationality, which roughly consists of forming beliefs in truth-conducive ways, making reasonable efforts to avoid fallacious reasoning, and keeping an open mind for new evidence.
Instrumental rationality, which involves choosing the most comprehensively effective means to attain one's actual goals, given one's actual beliefs.
Rational irrationality describes a situation in which it is instrumentally rational for an actor to be epistemically irrational.

Caplan argues that rational irrationality is more likely in situations in which:

people have preferences over beliefs, i.e., some kinds of beliefs are more appealing than others and;
the marginal cost to an individual of holding an erroneous (or irrational) belief is low.
In the framework of neoclassical economics, Caplan posits that there is a demand for irrationality. A person's demand curve describes the amount of irrationality that the person is willing to tolerate at any given cost of irrationality. By the law of demand, the lower the cost of irrationality, the higher the demand for it. When the cost of error is effectively zero, a person's demand for irrationality is high.

Part 1.2. Rational irrationality versus doublethink.
Rational irrationality is not doublethink and does not state that the individual deliberately chooses to believe something he or she knows to be false. Rather, the theory is that when the costs of having erroneous beliefs are low, people relax their intellectual standards and allow themselves to be more easily influenced by fallacious reasoning, cognitive biases, and emotional appeals. In other words, people do not deliberately seek to believe false things but stop putting in the intellectual effort to be open to evidence that may contradict their beliefs.

Part 1.3. Sources of preferences over beliefs.
For rational irrationality to exist, people must have preferences over beliefs: certain beliefs must be appealing to people for reasons other than their truth value. In an essay on irrationality in politics Michael Huemer identifies some possible sources of preferences over beliefs:

Self-interested bias: People tend to hold beliefs that, if generally accepted, would benefit themselves or the group with whom they identify. Self-interested bias is complicated by the fact that people may identify with groups to which they do not belong, but feel good about assuming that identity.
Beliefs as self-image constructors: People prefer to hold beliefs that best fit with the images of themselves that they want to adopt and to project.
Beliefs as tools of social bonding: People prefer to hold the political beliefs of other people they like and with whom they want to associate.
Coherence bias: People are biased towards beliefs that fit well with or reinforce their existing beliefs, regardless of those beliefs' degree of coherence with reality.

Part 2. Religion.
Many of the claims of religions are not easily verifiable in the day-to-day world. There are many competing religious theories about the origins of life, reincarnation, and paradise, but mistaken beliefs about these rarely impose real world costs upon the believers themselves. Thus, it may be instrumentally rational to be epistemically irrational about these matters. In other words, when forming or updating their religious beliefs, people may tend to relax their intellectual standards for the sake of driving popular support towards their beliefs.

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