Failed prediction exposed latent flaws in the rational economic agent concept

Evidence

There had always been pockets of resistance to this audacious theoretical move, but the crisis brought the qualms out into the open by suggesting that agents should not rely so heavily on the clones of the “rational” economists to ground their expectations. It wasn’t intentional, but the hue and cry over failed prediction tore the scabs off a number of repressed and forgotten wounds in the philosophy of the “rational economic agent.” This may explain why the journalists were so keen to indict the leaders of the “rational expectations” movement hard on the heels of the financial collapse. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 696

Categorization

• XREF: connects to: Ideal-type economic actor models are caricatures rarely found in pure form — Aris Komporozos-Athanasiou, Speculative Communities: Living with…, 50; Economic sociology should study what makes calculative action possible, not irrational intrusion — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 65; Economic performativity rests on human cognitive limits and mutual susceptibility — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1197 (+2 more)