Quote Originally Posted by Poopadoop View Post
First, it seems to have at its core the idea that humans are rational creatures who optimize their choices when it comes to money, and thus will behave in predictable ways. In contrast, there's ample evidence that people are irrational in many situations. It's a very shaky foundation.
Economists are the worst messengers I've come across. "Rational" means something different to them than its usage anywhere else. I recommend not getting hung up on the word. Economists account for every kind of behavior they can.

Second, it's trying to explain a chaotic system. The number of variables and their interactions are so complicated as to be nearly impossible to model, especially when no-one understands the nature of the variables or their interactions in detail.
The supply and demand model has been wildly successful. But yeah, more complex things are very hard to model.

Third, the sum of the first two problems is that you end up with a discipline where opposing models can have equal theoretical merit, and can be argued for equally convincingly. That makes it interesting and frustrating at the same time, and the overall impression is that neither side really understands things as well as they claim to.
At least at the supply and demand level, I don't know of any models that perform nearly as robustly.