Rationally Irrational?

One interesting effect of hurricane Sandy's recent devastation of the US northeast has more to do with fear and panic than physical realities.  Citizens of New York, New Jersey, and Connecticut have been lining up at gas stations, with lines spilling over into roads and bridges (and wait times that can last for hours), in order to fill up fuel tanks to power their cars and home generators.  However, lost among the panic was the fact that there is, in fact, no gas shortage.  One expert believes that the long lines at the pump have been aided by social media organizing "flash mobs" at certain gas stations, as well as group mentality. 

This is an interesting economic problem because it concerns the cost of acquiring information that allows one to make rational decisions.  We have discussed in class how it is rational to be ignorant about certain things, because the cost of educating oneself in those things is overly high in terms of opportunity cost of time.  However, one implication of this model is that if we are ignorant about things (such as the abundance or sparcity of gasoline), it can lead us to act irrationally in these circumstances.  In this case, a presumably rational decision not to research the gas situation led to irrational lining up at the pump.  As such, rational ignorance has led us to irrational actions. 

Such cases call into question whether certain decisions to forgoe knowledge on a particular issue can be completely rational in the first place, when the benefits of the foregone knowledge are uncertain.  Intuitively, I think there is an obvious case to be made that those people who decided to line up at the gas pumps were not rational in their decision not to research the gas situation in their areas.  That is to say that the cost of such research (in terms of their opportunity cost of time) would have been very low relative to the opportunity cost of waiting in line for hours.  The only way in which they could have made a rational decision about the correct amount of investment in education is by knowing the exact costs and benefits of such education--which may only become apparent after the education process taken place.  In other words, sometimes you don't know what you don't know--which is economically problematic. 

Because the only way in which we can make good decisions about what matters are best to be ignorant about is by knowing what we don't know, we hope that this is generally the case.  In practice, the way in which we practice rational ignorance in our lives is based on assumptions about what we don't know--not perfect information.  The degree to which we "know" what we "don't know," and are able to predict costs and benefits to education, determines the degree to which rational ignorance in regards to a particular issue is truly rational.