The efficient market hypothesis ("homo economicus") model is a prime example. Of course it is wrong. It is a model.
That doesn't mean it is not useful.
Howard Marks (highly successful investor over many decades) has this to say about it
> if you ignore the efficient market hypothesis, you’re going to be very disappointed, because you’re going to find out that very few of your active investment decisions work. But if you swallow it whole, you won’t be an investor, and you’ll give up on active success. So the truth, if there is one, has to lie somewhere in between, and that’s what I believe.
The efficient market hypothesis ("homo economicus") model is a prime example. Of course it is wrong. It is a model.
That doesn't mean it is not useful.
Howard Marks (highly successful investor over many decades) has this to say about it
> if you ignore the efficient market hypothesis, you’re going to be very disappointed, because you’re going to find out that very few of your active investment decisions work. But if you swallow it whole, you won’t be an investor, and you’ll give up on active success. So the truth, if there is one, has to lie somewhere in between, and that’s what I believe.
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