When people form long queues to obtain goods or withdraw money following rumours of possible future scarcity, observers often claim that these people are behaving irrationally Are they behaving irrationally?

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When people form long queues to obtain goods or withdraw money following rumours of possible future scarcity, observers often claim that these people are behaving ‘irrationally’ Are they behaving irrationally?

A rational individual can be thought of as someone who looks after their own interests and well being (Felkins, 1995). Throughout history periods of panic buying have developed through fuel shortages or in preparation for natural disasters. Petrol shortages in 2005 were caused according to a spokesman from the UK Petroleum Industry Association, not from difficulties with fuel supply but from panic buying as people queued to fill their tanks due to the forthcoming National protests (Newsquest Media Group, 2005). The recent floods to hit Britain also produced food and water shortages with the emergence of looting due to panic buying.  Carrie Douch, (2007), as cited in Elliott, (2007) reported a case of “grown men pushing kids out of the way” in order to get bottles of water.  This kind of behaviour occurs due to a breakdown of co-operation and the emergence of competition. This essay will discuss the extent to which people who form long queues to obtain goods or withdraw money following rumours of possible scarcity are behaving irrationally with emphasis upon co-operation and competition as explanations for the behaviour.

Pfeffer and Moore (1980) claimed that scarcity of resources increases conflict which results in a decline in the use of co-operation (Cited in Mckinley, et al. 1986). Grossman and Mendoza (2003) explained this as ‘the struggle for survival.’ An extreme example of this comes from ) who reported the emergence of “violent internecine competition”, with even “strong evidence of cannibalism” due to resource scarcity. Darwin would explain this kind of unsocial behaviour as ‘survival of the fittest’ meaning individual’s act in terms of their own self interest (Cited in Sahtouris, 1999). The emergence of conflict and competition with faced with a threat of scarcity cannot, therefore, be deemed to be irrational with the materialization of greed.  Fricker, (1988) claimed Western cultures were profoundly greedier than their non-Western counterparts. If, therefore, we are challenged with the possibility of scarcity, gluttony will emerge and thus scarcity becomes a self fulfilling prophecy. This occurs due to social dilemmas where individual rationality develops into irrationality resulting in a worse outcome for everybody which may otherwise have been avoided.

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The Prisoner’s Dilemma paradigm simulates the social dilemmas faced in life and the decisions individual face in whether to cooperate or compete.  This involves two individuals having the choice of either cooperating with their partner in crime and claiming innocence, or accusing their partner in crime. If both sides co-operate the outcome is favourable for both, however, if one or both decide to compete and exploit the other the outcome is less favourable. For example if both prisoners should receive a 5 year sentence for their crime yet both co-operate they will each receive a 2 year sentencing due ...

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