Acting Rationally isn’t the same as Acting Perfectly
For instance, running across the street to get out of the rain is rational. But you can still fall through an open manhole or get hit by a speeding car you didn’t notice.
People do, practically by construction of the term. Rationality is the social norm. Irrationality is typically defined as some variant of mental disorder.
Rational patterns of behavior are critical to an individual’s health and well-being. They’re also patterns that can be observed, extrapolated, and exploited. So you’ll often see an individualistic rational action (for instance, fleeing from danger) manipulated by a malicious actor (for instance, someone shouting “Fire!” in a crowded theater) in order to achieve a large scale negative result (a stampede or crowd crush).
You can point to a crowd crush and conclude “Everyone in that crowd was irrational” when no single individual did anything at any given moment that didn’t make sense from their point of view.
When I studied economics in high school my mum always emphasized that the assumption that people acted rationally was really fucking stupid
Acting Rationally isn’t the same as Acting Perfectly
For instance, running across the street to get out of the rain is rational. But you can still fall through an open manhole or get hit by a speeding car you didn’t notice.
Cool. People don’t reliably act rationally, though.
People do, practically by construction of the term. Rationality is the social norm. Irrationality is typically defined as some variant of mental disorder.
Rational patterns of behavior are critical to an individual’s health and well-being. They’re also patterns that can be observed, extrapolated, and exploited. So you’ll often see an individualistic rational action (for instance, fleeing from danger) manipulated by a malicious actor (for instance, someone shouting “Fire!” in a crowded theater) in order to achieve a large scale negative result (a stampede or crowd crush).
You can point to a crowd crush and conclude “Everyone in that crowd was irrational” when no single individual did anything at any given moment that didn’t make sense from their point of view.
And even if everyone did act rationally we have so many examples where that still doesn’t lead to the optimal outcome.
That said, economics is still a science. A field can have flaws and still be considered science