It’s worth noting that David Friedman’s Price Theory clearly states this in the very first chapter, just three paragraphs down:
The second half of the assumption, that people tend to find the correct way to achieve their objectives, is called rationality. This term is somewhat deceptive, since it suggests that the way in which people find the correct way to achieve their objectives is by rational analysis—analyzing evidence, using formal logic to deduce conclusions from assumptions, and so forth. No such assumption about how people find the correct means to achieve their ends is necessary.
One can imagine a variety of other explanations for rational behavior. To take a trivial example, most of our objectives require that we eat occasionally, so as not to die of hunger (exception—if my objective is to be fertilizer). Whether or not people have deduced this fact by logical analysis, those who do not choose to eat are not around to have their behavior analyzed by economists. More generally, evolution may produce people (and other animals) who behave rationally without knowing why. The same result may be produced by a process of trial and error; if you walk to work every day, you may by experiment find the shortest route even if you do not know enough geometry to calculate it. Rationality in this sense does not necessarily require thought. In the final section of this chapter, I give two examples of things that have no minds and yet exhibit rationality.
I don’t think it counts as a standard textbook, but it is meant to be a textbook.
On the whole, I think it’s perfectly okay for economists to mostly ignore how the equilibrium is achieved, since like you pointed out, there are so many juicy results popping out from just the fact that they are achieved on average.
I’ll note that in my policy PhD program, the points made in the post were well-understood, and even discussed briefly as background in econ classes—despite the fact that we covered a lot of the same econ material you did. That mostly goes to show the difference between policy and “pure” econ, but still.
It’s worth noting that David Friedman’s Price Theory clearly states this in the very first chapter, just three paragraphs down:
I don’t think it counts as a standard textbook, but it is meant to be a textbook.
On the whole, I think it’s perfectly okay for economists to mostly ignore how the equilibrium is achieved, since like you pointed out, there are so many juicy results popping out from just the fact that they are achieved on average.
Also, I enjoyed the examples in your post!
I really appreciate you citing that.
I should have made it clearer, but for reference, the works I’ve been exposed to:
Hal Varian’s undergrad textbook
Marginal Revolution University
Some amount of listening to Econ Talk, reading Investopedia and Wikipedia articles
MSc degree at LSE
I’ll note that in my policy PhD program, the points made in the post were well-understood, and even discussed briefly as background in econ classes—despite the fact that we covered a lot of the same econ material you did. That mostly goes to show the difference between policy and “pure” econ, but still.