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I completely agree. A bird in hand is worth 2 in the bush and all that. However, even today economic theories do not take this into account and assume rationali

I completely agree. A bird in hand is worth 2 in the bush and all that. However, even today economic theories do not take this into account and assume rationality === choosing the highest expected payoff. I.E. we're all statistical savants

ericd 10y ago
Yep, your main point that economics' rational man is a complete fiction is absolutely correct.
- HarryHirsch 10y ago
  He's a convenient fiction though. Since to homo oeconomicus a certain expense of USD 500 and the 50 % chance of a USD 1000 expense are the same, expect him to be rolled out to sell you high-deductible health insurance and health savings accounts. H. oeconomicus is the model human, consequently he isn't cashflow constrained, and the fact that HSAs double as tax shelters for the wealthy doesn't concern the Ideal Man either. University economics is a religion, not a science, it offers up myths instead of testable predictions on observable reality. High finance is a different deal, but they surely don't build their models on university textbooks.
  - slededit 10y ago
    > University economics is a religion, not a science That's a bit harsh. Is every field that employs simplified approximations of complex systems a religion as well? With that definition even physics is out and that's one of the more concrete sciences.
    - FullMtlAlcoholc 10y ago
      At times it does appear to be a religion because of the cult of personality that proliferates (remember the Greenspan years?) and, most significantly, the blind faith and slavish devotion to free markets being a solution to everything. What I find most off-putting are those who advocate for wholesale changes in our society on little more than hypothesis and faith instead of running experiments starting at the smallest reasonable scale and then successively working your way up from that. It should at least pretend to try to applying basic scientific methodologies to its practice.Psychology has evolved to being a rigorous, evidence based social science. That psychology is not one of the foundations of studying economics is also problematic too.
    - mcguire 10y ago
      If it does not admit that it's simplified assumptions are simplified assumptions and seek to improve them, then yes. Which does not apply to physics. Economics has a weird tendency to invoke "outside shocks" to explain why their models fail, and seems to have difficulty identifying those shocks.

ericd 10y ago

Yep, your main point that economics' rational man is a complete fiction is absolutely correct.

HarryHirsch 10y ago
He's a convenient fiction though. Since to homo oeconomicus a certain expense of USD 500 and the 50 % chance of a USD 1000 expense are the same, expect him to be rolled out to sell you high-deductible health insurance and health savings accounts. H. oeconomicus is the model human, consequently he isn't cashflow constrained, and the fact that HSAs double as tax shelters for the wealthy doesn't concern the Ideal Man either. University economics is a religion, not a science, it offers up myths instead of testable predictions on observable reality. High finance is a different deal, but they surely don't build their models on university textbooks.
- slededit 10y ago
  > University economics is a religion, not a science That's a bit harsh. Is every field that employs simplified approximations of complex systems a religion as well? With that definition even physics is out and that's one of the more concrete sciences.
  - FullMtlAlcoholc 10y ago
    At times it does appear to be a religion because of the cult of personality that proliferates (remember the Greenspan years?) and, most significantly, the blind faith and slavish devotion to free markets being a solution to everything. What I find most off-putting are those who advocate for wholesale changes in our society on little more than hypothesis and faith instead of running experiments starting at the smallest reasonable scale and then successively working your way up from that. It should at least pretend to try to applying basic scientific methodologies to its practice.Psychology has evolved to being a rigorous, evidence based social science. That psychology is not one of the foundations of studying economics is also problematic too.
  - mcguire 10y ago
    If it does not admit that it's simplified assumptions are simplified assumptions and seek to improve them, then yes. Which does not apply to physics. Economics has a weird tendency to invoke "outside shocks" to explain why their models fail, and seems to have difficulty identifying those shocks.