5 ms·

I think it's also a perfect counterexample to the assumption of rationality by the Chicago school of economics.

• sicp-enjoyer 4y ago
  That's not how economists use rationality. Individuals derive other enjoyments from gambling besides their earnings. This desire to seek things they like is the "rationality", purposeful behavior, not the ability to make optimal bets or play mathematical games.
  • nerdponx 4y ago
    Yet the economics literature is full of this exact misuse of the term "rationality", not to mention what economists say in their blogs, op-eds, and interviews. Not to mention the traditional econ 101 curriculum.
    • sicp-enjoyer 4y ago
      In the literature I have read, this point is one of the first things they clarify and address common criticisms.
• RunSet 4y ago
  Another such example that rational self-interest is an invalid assumption: > Mr Greenspan admitted that his view of the world had been flawed. > Self-regulation by Wall Street had failed, he said. "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity – myself especially – are in a state of shocked disbelief." > And he went on: "I found a flaw in the model that I perceived is the critical functioning structure that defines how the world works." https://www.independent.co.uk/news/business/news/greenspan-says-crisis-left-him-in-shocked-disbelief-971609.html https://www.independent.co.uk/news/business/news/greenspan-s...
• colinmhayes 4y ago
  You have no way of knowing how much utility the lottery players gain outside of their expected winnings.