Here is the abstract of a new article in the journal of economic literature.
Markets and Manipulation: Time for a Paradigm Shift?†
There is a growing appreciation in economics that people have emotional vulnerabil- ities, commitments to social norms, and systematic irrationalities that impact their decision making and choice in the market place. The flip side of this is that human beings are susceptible to being manipulated by unscrupulous agents single-minded about marketing their services and wares. This paper reviews George Akerlof and Robert Shiller’s Phishing for Phools: The Economics of Manipulation and Deception, alongside other writings in the field, and discusses how this research agenda can be taken forward. The paper shows how this new research can shed light on the ubiq- uity of corruption in so many societies, and proposes ideas for controlling corruption
The implicit is that here is a model of rationality. The presumption is that it is analytical, quantitaive and precise. All else is irrational. Why should buying a car based on color, sound system and being like – or unlike – my neighbors, be irrational. Perhaps those are what rationality – service of thinking in the support of life really is. Economics tends to divide the world into rational – good, and irrational – bad, in congruence with conventional opinion, which also appreciates rationality. . But by calling some things irrational that are life serving tens to support a market of quantities and the world of experts rather than a market of creativity.