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Almost nobody assumes absolutely perfect information; even Adam Smith was relying on approximations of actual behaviour. Most economics relies on the assumption
by nickff 7y ago
Almost nobody assumes absolutely perfect information; even Adam Smith was relying on approximations of actual behaviour. Most economics relies on the assumption that information is close enough to perfect that we can just assume away any difference.
Behavioural economics has proven unreliable, with results that are (at least) difficult to replicate, and non-predictive.
- cik2e 7y agoSure, you can say behAvioral economics experiments are unreliable. But even if this field did not exist, assuming close to perfect information is simply naive in my opinion. Unless you account for insider trading, which the pessimist in me believes is rampant. In truth, none of us know, but I think it’s worthwhile to consider the alternative to what is taught in textbooks.