According to economists, we should all be cold, clear-eyed spenders who always choose what would benefit us the most economically.

In their economists’ world, we are all as emotionless, passionless, and predictable as the Vulcan Mr. Spock in Star Trek, since we are supposedly programmed to aim for equilibrium and uniformity.

Still, do you know anyone (yourself included) who behaves that way, every time, and all the time?

I personally have not met that perpetual rational personthat Homo Economicus, or Econ—as yet.

In reality, we (e.g. me) are not always logical or consistent, nor do we behave in the manner that gives us the best bang for our bucks.  Instead, we misbehave.

 

Now the challenge is that classic economists insist that human beings are Econs and hence base their theories on exactly that type of well-behaved Econs.

In order to achieve the same mathematical precision of hard sciences, economists have made a radically simplifying assumption that people are “rational optimizers” …