Overgrazing Behavior and Rationality: a Dynamic Perspective

Although humans are assumed to be rational beings, there has been little consensus regarding the criteria for distinguishing rational from irrational behaviors. For example, overgrazing that often results in a tragedy of the commons is usually considered irrational. A subsequent question may be why there are always some rational people engaging in irrational overgrazing. Based on rationality theories and related research findings, this research analyzes the overgrazing behavior in the National Health Insurance system of Taiwan. The research findings indicate that system sustainability, the effectiveness of control, and the possibility of jumping out of the system are the critical factors that have effects on overgrazing behavior and the rationality orientation. If system sustainability is not a question, rational and opportunistic agents tend to be driven by greed, and the effectiveness of control is crucial in determining the behavior of the agents. However, once the system is perceived to be unsustainable, the motive of fear may dominate and the possibility of jumping out of the system becomes critical for the agents to choose between self-restrained and overgrazing behaviors. In addition, it is suggested that the“it won’t be me effect”may be responsible for the eventual collapse of the system.