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> The problem with the "rational agent" model is that it's a tautology. Yes sure everyone wants more utility, great, but everyone's utility function is slightly
by mlindner 6y ago
> The problem with the "rational agent" model is that it's a tautology. Yes sure everyone wants more utility, great, but everyone's utility function is slightly different. As you say some are risk takers pursuing insane rewards/yields/profits with low probability, while others are super risk-averse conservative in their choices, etc.
There's nothing in the rational agent model that assumes that everyone has the same definition of utility function. Different people want different things.
- pas 6y agoYes, of course, but that's what I mean by problem. Saying people are (bonded rational) utility function maximizers doesn't give us a predictive theory, it just means in a fancy way people do what they do for "reasons", and everyone usually have different set of reasons. Of course, it's fine as a very-very general fundamental theory, if you then want to study how people's revealed and non-revealed (old names for implicit and explicit) preferences aggregate into a utility function. (There's a whole bunch of math about pairwise comparison matrices. Lately there's some movement in that space about using perturbation to model inconsistencies in preferences, etc.)