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The way they introduce the positions of Akerlof and Schiller seems to indicate that markets are not irrational, but insufficiently informed.
by microcolonel 11y ago
The way they introduce the positions of Akerlof and Schiller seems to indicate that markets are not irrational, but insufficiently informed.
- danharaj 11y agoWe are not rational agents but agents of bounded, imperfect rationality. Even if all the information is out there, our bounded natures invite the ideas in this article.
- dkarapetyan 11y agoHas nothing to do with information. The argument in the book is about markets exploiting kinks in human nature and reasoning to sell things that in the long term are not beneficial for anyone but driven by short-term thinking people buy the stuff anyway. Even if you were sufficiently informed a lot of research in psychology and behavioral economics shows that you still wouldn't make the "rational" decision.