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I don't think you've successfully demonstrated that those assumptions are bad. They're simplifying assumptions that are necessary to have a "basic" economic the
by wtallis 1y ago
I don't think you've successfully demonstrated that those assumptions are bad. They're simplifying assumptions that are necessary to have a "basic" economic theory in the first place—one with tractable and understandable mathematics that can produce an answer without immediately dumping you into partial differential equations or requiring impossibly detailed input data.
The assumptions are only bad if they prevent the simple models from being useful, and the existence of a scenario where a model's simplifying assumptions prevent it from being useful does not prove that the model is worthless.
- thayne 1y agoI don't think the model is worthless. But there also going to be many real world scenarios where they aren't good enough. It's like doing physics where you assume perfectly uniform spherical objects in a vacuum. It isn't worthless just because that isn't how the real world works, but depending on the circumstance it can also give you incorrect results, and sometimes even be way off.