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 Originally Posted by NightGizmo
So irrationality can't exist within an economic model? It assumes that anything anyone does, regardless of how crazy, stupid, or self-destructive, is rational? I don't see how any model that's based on such a flimsy premise could work.
Unless you destroy the definition of rational, I guess.
A model isn't meant to be reality it's meant to be a model. How well that model works dictates its use. As far as I'm aware (not very) economic models are incredibly simple in their scope when compared to what you'd expect if a model were to predict reality.
Emotional factors clearly play a role in decisions people make in real life and I'm sure Wuf has said in the past there is a whole section of economics that tries to deal with quantifying these emotions.
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