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grobstein comments on Rationality is Systematized Winning - Less Wrong
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If humans are imperfect actors then in situations (such as a game of chicken) in which it is better to (1) be irrational and seen as irrational then it is to (2) be rational and seen as rational
then the rational actor will lose.
Of course holding constant everyone else's beliefs about you, you always gain by being more rational.
This is a classic point and clearer than the related argument I'm making above. In addition to being part of the accumulated game theory learning, it's one of the types of arguments that shows up frequently in Derek Parfit's discussion of what-is-rationality, in Ch. 1 of Reasons and Persons.
I feel like there are difficulties here that EY is not attempting to tackle.