> human behavior is irrational in predictable ways. My favorite example of this is the ultimatum game [1]. The game has two players. The first player proposes

> human behavior is irrational in predictable ways. My favorite example of this is the ultimatum game [1]. The game has two players. The first player proposes a split of a "pot" of money. The second player can accept that split and take their share, or reject the split leaving both players with NOTHING. The "rational" action for the first player to take is to suggest a split where he keeps the largest amount of the pot possible. The "rational" action for the second player is to then accept that split, because something is better than nothing. As you can imagine, real-world runs of this game have proven that nobody acts "rationally" (splits of less than 20%, when proposed, are often rejected). Homo economicus [2] doesn't have emotions or empathy. It doesn't value extrinsic things like "justice" or "fairness". Homo sapiens does. In other words, while people might act rationally, the economic definition of "rational" and the common definition of "rational" are often two entirely different things. 1. http://en.wikipedia.org/wiki/Ultimatum_game http://en.wikipedia.org/wiki/Ultimatum_game 2. http://en.wikipedia.org/wiki/Homo_economicus http://en.wikipedia.org/wiki/Homo_economicus