Rationality is an engineering feat
Rationality is something you make, not something you are
One of the conditions of economic rationality is transitivity. Transitivity means that if you like chocolate ice cream more than vanilla, and like vanilla ice cream more than strawberry, then you should like chocolate ice cream more than strawberry.
One reason why transitivity is useful is that it lets you stop doing things even when your preferences are complete. If you’re choosing which chair to sit in, and you like the office chair more than the lounge chair, and you like the lounge chair more than the dining chair, but you like the dining chair more than the office chair, then you’re going to cycle between the chairs. No matter which chair you’re sitting in, there will always be another chair you’d rather be sitting in. As a result, you’ll always be getting up from your current chair to move to the one you’d rather be sitting in, and you’ll cycle between the chairs until you run out of energy and die.
An example of this kind of cycling behavior can be observed in human infants with a parent and the parent’s twin sibling. In this video, the infant always prefers to be held by the person who isn’t currently holding them, thus cycling between the two options. The kid isn’t indifferent between the parents because they’re willing to pay a cost (a use of time and energy) to go from one to the other.
This simple example reveals an important empirical truth: Rationality isn’t a property that a human (or other economic agent) simply has or does not have in a vacuum. Instead, rationality is something a system has to learn how to build in an environment. Whether a system is worth calling “rational” depends on how consistently it’s able to construct rationality in the kinds of environments you expect to see it in.
It’s helpful to compare rationality to another cognitive competency, object permanence. Object permanence is the belief that an object goes on existing even when you’re not looking at it. The object permanence hypothesis was created to explain infant behavior in the A-not-B task, with the idea being that infants lack object permanence until at some point in their maturation they acquire it.
Subsequent research on the A-not-B task showed that infants become more or less likely to demonstrate object permanence by varying the details of the task or the environment. Sometimes, younger infants even demonstrate more object permanence than older infants. This is inconsistent with the developmental story where at one point in time, infants “lack” object permanence and then at a later point in time “have” object permanence. A better theory is that object permanence is something the infant has to construct, and it is more likely to construct it in some circumstances then others. This is true for adults as well as infants.
Rationality works the same way. A human never “is” or “is not” rational. Instead, they have some ability to produce rationality in a given set of circumstances. We say that someone is “rational” when their likelihood of producing rationality in the kinds of circumstances we expect to find them in is high enough that calling them “rational” is a useful categorization decision.
An example of a situation in which people tend not to construct rationality is the “rationally irrational” hypothesis for explaining electoral voting outcomes. The hypothesis says relatively easy to construct rationality when their are self-interested benefits to being rational and costs to being irrational. When the benefits of irrationality exceed the costs, the system will tend to construct irrationality.
Ultimately, rationality isn’t a mental property. It’s an engineering feat—something that exists in a system when, and only when, the system is successfully built to be that way. A bridge may or may not have the capacity to support some amount of weight depending on the situation and how it was built. Similarly, a person, or any other kind of economic agent, may or may not be rational depending on the situation and the bodily relationships that the person consists of. Rationality is something you make, not something you are.