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> any graduate student with a clipboard can demonstrate that reasonable-seeming people are often totally irrational And yet, mainstream theories of economy ass

> any graduate student with a clipboard can demonstrate that reasonable-seeming people are often totally irrational And yet, mainstream theories of economy assume that individuals are reasonable actors successfully and efficiently acting in their own self-interest.

nitwit005 2y ago
You're going to struggle to find any economist who agrees with the concept that everyone is acting rationally.
andrewflnr 2y ago
Somewhat famously, people do get more rational when money is on the line. Not homo economicus rational, but a little more connected to reality. Usually this is interpreted cynically.
mr_toad 2y ago
> And yet, mainstream theories of economy assume that individuals are reasonable actors successfully and efficiently acting in their own self-interest. They really don’t. In the context of this discussion it’s quite ironic that this myth is so widespread.
- scotty79 2y ago
  This myth is basically a tenet of popular capitalism. It's as spread as the belief in capitalism itself.
  - titannet 2y ago
    Even the US is fairly far away from theoretical capitalism.. "No barriers to market entry" - ever seen that one in practice?
    - scotty79 2y ago
      I think in US barriers of entry are lower. I've seen a video about a software developer in US that lived in the neighborhood where garbage collection company wanted to charge extra for getting out of the truck and emptying the trash bins. This guy basically told their neighbors that he can provide same service they used to have at the same rate, collected orders and bought random used "smaller" (but still quite large) garbage truck with robotic hand to pick up the bins. In Europe without special driving license for trucks he wouldn't be able to drive it (it weighed above 3.5T). I'm assuming other kinds of licenses are also required to ensure the collected garbage is disposed of properly. In many places garbage collection is a service that's ordered through the local government so that the prices can be kept similar for everybody so that people from remote places (who'd need to pay more for collection) won't just toss their garbage into the forests and such.
analog31 2y ago
I would call it a zero-order approximation. We all "know" that people behave irrationally, yet studies that attempt to demonstrate systematically irrational behaviors end up producing weak or irreproducible results. Or, the studies uncover rational behaviors that the researchers didn't expect.
- scotty79 2y ago
  Do you have some studies where unexpected rationality was discovered?
  - analog31 2y ago
    The one I remember is about "loss aversion" where it turned out that people were making reasonable choices, but not ones based on the simplistic probabilities that the researchers had designed for their experimental method. Another one is the "marshmallow test" where it turns out that some children have a reason to not trust adults. I don't have detailed references or anything like that.

nitwit005 2y ago

You're going to struggle to find any economist who agrees with the concept that everyone is acting rationally.

andrewflnr 2y ago

Somewhat famously, people do get more rational when money is on the line. Not homo economicus rational, but a little more connected to reality. Usually this is interpreted cynically.

mr_toad 2y ago

> And yet, mainstream theories of economy assume that individuals are reasonable actors successfully and efficiently acting in their own self-interest. They really don’t. In the context of this discussion it’s quite ironic that this myth is so widespread.

scotty79 2y ago
This myth is basically a tenet of popular capitalism. It's as spread as the belief in capitalism itself.
- titannet 2y ago
  Even the US is fairly far away from theoretical capitalism.. "No barriers to market entry" - ever seen that one in practice?
  - scotty79 2y ago
    I think in US barriers of entry are lower. I've seen a video about a software developer in US that lived in the neighborhood where garbage collection company wanted to charge extra for getting out of the truck and emptying the trash bins. This guy basically told their neighbors that he can provide same service they used to have at the same rate, collected orders and bought random used "smaller" (but still quite large) garbage truck with robotic hand to pick up the bins. In Europe without special driving license for trucks he wouldn't be able to drive it (it weighed above 3.5T). I'm assuming other kinds of licenses are also required to ensure the collected garbage is disposed of properly. In many places garbage collection is a service that's ordered through the local government so that the prices can be kept similar for everybody so that people from remote places (who'd need to pay more for collection) won't just toss their garbage into the forests and such.

analog31 2y ago

I would call it a zero-order approximation. We all "know" that people behave irrationally, yet studies that attempt to demonstrate systematically irrational behaviors end up producing weak or irreproducible results. Or, the studies uncover rational behaviors that the researchers didn't expect.

scotty79 2y ago
Do you have some studies where unexpected rationality was discovered?
- analog31 2y ago
  The one I remember is about "loss aversion" where it turned out that people were making reasonable choices, but not ones based on the simplistic probabilities that the researchers had designed for their experimental method. Another one is the "marshmallow test" where it turns out that some children have a reason to not trust adults. I don't have detailed references or anything like that.