Why do economists assume that people behave rationally and in their self-interest? Do you agree with this?
Answer (1)
Economists assume people are rational so that they can predict behavior based on benefits and costs. They also assume people act in their self-interest, like choosing a job that pays more or buying from a cheaper store. For example, a tricycle driver picks routes with more passengers to earn more, not just out of habit.I agree with this assumption most of the time, but sometimes people act emotionally, like helping others even if there's no personal gain. This is why economists are now including psychology to better understand human behavior.
