He makes the key distinction lost on so many pop-critics of economics who think that economists believe(d) everyone is perfectly rational
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" In the early 1970s, when Thaler was a student, his professors didn't argue that human beings were perfectly rational. >>"
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>>" They argued that human irrationality didn't matter, for the purpose of economic theory, because it wasn't systematic.">>
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>> "It could be treated as self-cancelling noise." Thaler, Sunstein, Quiggin, Kahneman, Tversky etc showed it IS systematic and predictable
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But it's systematic in tons of very different ways, essentially defying Occam's Razor. No grand theory of irrationality is on offer.
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And it may not ever be on offer, but that may not matter so much. In theory, as in statistics, "Heterogeneity rules" is a good motto.
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And *that's* what makes Thaler so brilliant and crucial and so deserving of our profession's highest honour. End thread.
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Asst Prof