Hal R. Varian, professor in Economics at University of California at Berkeley, explains the irrationality of common people (i.e. non-economists):
“The Rubinstein bargaining model is so elegant that economists rushed to test it in the laboratory. They found, alas, that elegance does not imply accuracy. Naive subjects (i.e., noneconomics majors) aren’t very good at looking ahead more than one or two steps, if that” (2006, Intermediate Micreconomics (W. W. Norton & Company: New York): p. 545).
Big words from a person who represents the increasingly questioned discipline of Economics.
Simon Hedlin Larsson
