First is that the boundary between “sophisticated” and “myopic” consumers is not only artificial, it is either patently false or non-falsifiable. You could only verify a consumer as sophisticated/myopic based on whether they favored price discrimination and transparency. But it is almost trivially true that nearly all consumers will sometimes favor these institutions and sometimes not, so “sophisticated” and “myopic” don’t neatly divide agents. You could, alternatively, say that it is activity and not the individual agents that the kinds apply to, but then you could divide any set of agents that way, regardless of how they were composed or what activities they took, which would not be enough to use the kinds to establish trends. This same criticism can be leveled against “fragile/non-fragile” systems/institutions.
Second, it’s not clear how this sort of division is useful. As you point out, it offers no solution to the problem it poses. While it can be true that some problems may be beyond solution by current means, our means includes our current knowledge of the problem. A well-developed theory of sophisticated/myopic consumers and how they relate to institutions would give you some idea of what would be needed to make a system less fragile or consumers more sophisticated, even if those means were currently impractical. For instance, if system size (in terms of people, dollars, influence, or some other metric) were the issue, it would be fair to posit that making smaller systems would make them less fragile. (I picked size only because you mention it specifically.) But this theory seems to directly suppose that this is just the way things are.
I have a few problems with this theory.
First is that the boundary between “sophisticated” and “myopic” consumers is not only artificial, it is either patently false or non-falsifiable. You could only verify a consumer as sophisticated/myopic based on whether they favored price discrimination and transparency. But it is almost trivially true that nearly all consumers will sometimes favor these institutions and sometimes not, so “sophisticated” and “myopic” don’t neatly divide agents. You could, alternatively, say that it is activity and not the individual agents that the kinds apply to, but then you could divide any set of agents that way, regardless of how they were composed or what activities they took, which would not be enough to use the kinds to establish trends. This same criticism can be leveled against “fragile/non-fragile” systems/institutions.
Second, it’s not clear how this sort of division is useful. As you point out, it offers no solution to the problem it poses. While it can be true that some problems may be beyond solution by current means, our means includes our current knowledge of the problem. A well-developed theory of sophisticated/myopic consumers and how they relate to institutions would give you some idea of what would be needed to make a system less fragile or consumers more sophisticated, even if those means were currently impractical. For instance, if system size (in terms of people, dollars, influence, or some other metric) were the issue, it would be fair to posit that making smaller systems would make them less fragile. (I picked size only because you mention it specifically.) But this theory seems to directly suppose that this is just the way things are.