Irrationality at first sight (but not on second thoughts)

Five ways in which “irrationality” can be rational.

One early Saturday morning a few months ago, I went for a jog with Luka. On our way back from the park, we noticed a £20 note stuck on the pavement (it had been raining earlier). Luka’s eagle eye had spotted it even before I did — for a seven-year-old, 20 quid is a tidy sum. He had clearly not yet heard the old economists’ joke ( Two economists walk down the street, and there, in front of them on the pavement lies a $20 note. As one of them bends down to pick it up, the other one says, “Oh, I wouldn’t bother if I were you.” “Why not?” “If it was genuine, someone would already have taken it.”), and stopped abruptly to quickly peel it off the pavement.

Few people would disagree that Luka was being rational: interrupting the jog and the effort of bending down were a negligible effort compared to the monetary gain. When the cost of a transaction is outweighed by the benefit, it is not only worthwhile, it is more worthwhile than doing nothing. But is foregoing an action that would make us better off (or taking an action that makes us worse off) always irrational? Posing the question is answering it! Here are five examples.