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Rationally Arbitrary Decisions in Administrative Law

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How should administrative law cope with genuine uncertainty, in which probabilities cannot be attached to outcomes? I argue that there is an important category of agency decisions under uncertainty in which it is rational to be arbitrary. Rational arbitrariness arises when no first-order reason can be given for the agency’s choice, yet the agency has valid second-order reasons to make a particular choice. When these conditions obtain, even coin flipping may be a perfectly rational strategy of decision making for agencies. Courts should defer to rationally arbitrary decisions. There is a proper role for courts in ensuring that agencies have adequately invested resources in information gathering, which may dispel uncertainty. Yet in some cases the value of further investments in information gathering will be genuinely uncertain. If so, courts should defer to agencies’ second-order choices about informational investments on the same grounds that justify deference to agencies’ first-order choices under uncertainty.

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