Even behaviors that look irrational shift measurably when the costs and payoffs change, revealing that people weigh consequences even when they cannot articulate doing so. Rationality here means responsiveness to incentives, not perfect calculation or good outcomes.
When the risk of AIDS raised the cost of unprotected intercourse, American teenagers rationally shifted toward oral sex, which carries far lower disease risk. The change in sexual behavior tracked the change in relative danger, showing cost-benefit reasoning operating even among adolescents assumed to be impulsive.
Criminal activity falls when the probability and severity of punishment rise, so would-be offenders behave as if weighing expected penalties against gains. This implies deterrence works through perceived cost, and that raising certainty of being caught can matter more than raising sentence length.
Employers may discriminate by using group averages as cheap proxies when individual information is costly, producing self-fulfilling cycles: if a group is expected to underperform and treated accordingly, members have weaker incentives to invest in skills, confirming the expectation. The outcome looks like prejudice but can be driven by rational use of imperfect signals.
Addicts can be modeled as making forward-looking tradeoffs, consuming more today partly because they anticipate future consumption, and cutting back when the long-run price rises (for example, when cigarette taxes are expected to climb). Consumption patterns responding to anticipated future prices suggest even addiction involves intertemporal calculation rather than pure compulsion.
People accept the high costs of crowded cities because proximity to many skilled others raises their own productivity and wages through knowledge spillovers. The density that seems irrationally expensive is rational once the learning and matching benefits of being near other talented people are counted.