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You are missing the greater point. I agree with you. Before Prospect Theory, economists did assume risk was irrelevant and that one would choose either A or B f

You are missing the greater point. I agree with you. Before Prospect Theory, economists did assume risk was irrelevant and that one would choose either A or B for both. That even a layman would find it nonsensical is exactly my point. I should've put rational in quotes to show sarcasm or followed rational with "defined by economists at that time"

CPLX 10y ago
> That even a layman would find it nonsensical is exactly my point. I have a degree in economics and both my parents are professors of economics, so I have some perspective on this. Economics as a discipline has never really been confused about risk in the way you describe.
- FullMtlAlcoholc 10y ago
  Let's look at it another way and the so-called "sunk cost" fallacy. I have somewhat expensive tickets to an NBA game. On the night of the game, I'm sick and there's a blizzard. If I paid for those tickets, I'm damn well going to that game. If they were given to me, I'm staying in. Study after study shows that most people also would act in this matter. That this type of behavior was considered irrational made me think that a lot of economists in the past didn't try to understand actual human behavior. BTW - this is not comparable to an investment situation I have a degree in economics too and my main complaint is that I wish those in the field treated it with more rigor, more like a scientific or engineering field... explicitly state the simplified assumptions and limits on the models. And don't proclaim that your model is correct without experimenting. It's not as much a problem as it was in the past, but people like Hayek advocated for whole changes in society based upon ideology and philosophy without any experimental evidence. I understand it is difficult to conduct experiments, but if that is the case, stop being so certain and adamant in your position without evidence

CPLX 10y ago

> That even a layman would find it nonsensical is exactly my point. I have a degree in economics and both my parents are professors of economics, so I have some perspective on this. Economics as a discipline has never really been confused about risk in the way you describe.

FullMtlAlcoholc 10y ago
Let's look at it another way and the so-called "sunk cost" fallacy. I have somewhat expensive tickets to an NBA game. On the night of the game, I'm sick and there's a blizzard. If I paid for those tickets, I'm damn well going to that game. If they were given to me, I'm staying in. Study after study shows that most people also would act in this matter. That this type of behavior was considered irrational made me think that a lot of economists in the past didn't try to understand actual human behavior. BTW - this is not comparable to an investment situation I have a degree in economics too and my main complaint is that I wish those in the field treated it with more rigor, more like a scientific or engineering field... explicitly state the simplified assumptions and limits on the models. And don't proclaim that your model is correct without experimenting. It's not as much a problem as it was in the past, but people like Hayek advocated for whole changes in society based upon ideology and philosophy without any experimental evidence. I understand it is difficult to conduct experiments, but if that is the case, stop being so certain and adamant in your position without evidence