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I've just started this and on page 5 I read:
" Many times the information required to arrive at the theoretical optimum is not available to those who make the decisions, and even if the information is available, the people who make the decisions often do not have an incentive to implement the optimal policy."If we could only be more like homo economicus, how much better capitalism would work. Cue the application of behavioural genetics in engineering mode.
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Homo economicus is "... a portrayal of humans as agents who are consistently rational and narrowly self-interested, and who usually pursue their subjectively-defined ends optimally." (Wikipedia).
In fact public choice theory does assume homo economicus, but asserts that incentives often can't or don't align - eg the principal-agent problem, market failure, etc. In capitalist economies consisting of real people, things work even less well.
Who or what should we blame?
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