Ayn Rand Philosophy, Objectivism, Science, Self-interest

[NightGizmo]

If we assume that people don't maximize their utility, then, well, I don't know what happens to economics. The field probably becomes nonsensical.

Have you read Thinking, Fast and Slow by Daniel Kahneman? He won a Nobel prize in economics for basically proving that people are not rational agents that always try to maximize their utility.

[wufwugy]

Have you read Thinking, Fast and Slow by Daniel Kahneman? He won a Nobel prize in economics for basically proving that people are not rational agents that always try to maximize their utility.

As far as I can tell, what he did was help change modelling for how utility is maximized. For example he showed holes in the expected utility hypothesis, which says that the value of a choice is the statistical expectation of the valuations of the outcome of the relevant choices. This doesn't suggest utility isn't maximized, but that valuation is assessed differently than earlier models suggest.

There are versions of rational choice theory that are testable, and they're all flawed. I don't know much about the specific models, and have instead been discussing the assumption behind the theory behind the models. Kahneman didn't "disprove" rational choice theory, but gave more insight into it. Rational choice theory has been used increasingly over the years, presumably because the models "work" even though they don't work perfectly.