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Back in my ECON 101 class [1], the message the professor drilled home above all else was “Behaviour is Optimization.” [2] This assumption that people are rational agents is the fundamental assumption that allows economists to distill the hot and unpredictable mess that is human behavior into something predictable and procedural. What’s a ration agent? It’s something that acts optimally under a set of premises and choices. For example: under the premise that more money is better if a rational agent has the choice between a $5 outcome and a $10 outcome they will always pick the larger one. Another example: under the premise that more of a good is always better if given the choice between 3 oranges or 1 orange, the 3 oranges are always taken. You might be thinking to yourself, well, there are so many other things that go into decisions than something as cut-and-dry as cost or volume. And you’d be right. But that’s the beauty of it. It allows you to simplify otherwise complicated decision

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