Kaj_Sotala comments on What Cost for Irrationality? - Less Wrong
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I have an objection to the first example listed.
Let's look at this scenario with some numbers attached. A and B each pay Pacific Gas $100 each month. A has less reliable service, and B has more reliable service. To simplify the given scenario, let's say that only one percentage change in price is offered to each group, 30%. So A is offered a $30 surcharge for more reliable service, and B is offered a $30 discount for less reliable service. Money has diminishing marginal utility, so these two offers can not be compared in an entirely straightforward fashion. Let's suppose that A and B both have a monthly discretionary spending budget of $500, with their other income going to fixed costs like rent. If A takes Pacific Gas's offer, his budget drops to $470. If B takes his own offer, his budget goes up to $530. In terms of marginal utility, the difference between $470 and $500 is bigger than the difference between $500 and $530. If the disutility of less reliable service is smaller than that difference, then there are utility values for which both A and B are rational. If the disutility is instead larger than the difference between the expected positive of utilities for A and B, then one of them must be rational.
So in this example it's unclear that there's any irrationality at all; even if there is, it's easy to just assume one would be in the "better" group and so avoid confronting the reality of the Status Quo bias. A better example would involve a situation in which group A's status quo is worse than group B's status quo, group membership is determined randomly, and the members of group A tend to reject an offer which would clearly move them into a position identical to B's status quo.
This is a very good point.