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This article appears in Kyklos as part of a special symposium edited by Ravi K. Roy and Arthur T. Denzau that has been assembled to reflect on the contribution of Arthur T. Denzau and Douglass C. North's seminal work on "Shared Mental Models: Ideologies and institutions."

A review of “Humanomics: Moral Sentiments and the Wealth of Nations for the Twenty-First Century" by Vernon L. Smith and Bart J. Wilson

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Summary The theory of rational irrationality suggests that voters are biased and do not face sufficient incentives to choose rationally; instead they vote for various private reasons. As a result, socially and economically destructive policies can receive widespread public support. Furthermore, because there is no private benefit of learning from experience, such policies can persist over time. We argue here that despite this otherwise dismal outlook on public policy, the theory of rational irrationality leaves two avenues for economically sensible reform: First, when the ex post costs of irrationality are higher than expected, rationally irrational voters will reduce their consumption of irrationality and demand more rational policies. Second, rationally irrational voters can be convinced to rationally update their policy preferences through the use of appealing rhetoric and persuasion by experts. We discuss these two avenues for reform using the example of the repeal of the 18th amendment, which, as we will show, relied on both updating as well as persuasive campaigning.