[chaorace]

> Economic "models" make assumptions like markets being efficient. Meanwhile in the business classes next door they teach how to avoid competition because it's a race to the bottom

You've more-or-less verbatim described the impetus behind the modern development of behavioral economics. That older sort of classical theory which you describe -- the one which frames the world in terms of "rational economic agents" -- has been out of vogue for nearly two decades now. Sure, you can still find the idea taught in classes... but professors now treat the classical ideas more like a simplified foundation rather than gospel -- much like a physics professor teaches Newtonian Physics before moving on to Relativity.

> I'd like an economic model as powerful as the laws of thermodynamics, where everything is included if not explicitly. But I haven't seen one.

... and this is where you diverge in thinking from the new-school behavioral economists. According to the new-school, economics is a social science, a thing of statistical measurements and probabilities. Most modern economists would probably be inclined to chide you and say that attempting to characterize economics in terms of hard laws would be the same as disregarding the human element -- a reversion to the classical idea of "rational economic agents".

[ghaff]

Somewhat. Some of the science behind behavioral economics relates to the fact that there are actually rationales behind certain preferences that aren't strictly about expected value. The utility of money is not a linear function. Etc.

People also don't understand statistics well as a whole, to be sure. But behavioral economics is also not purely about people being irrational.

[TSP00N3]

Good read (or in my case listen on Audible) on behavioral economics: https://en.m.wikipedia.org/wiki/Misbehaving:_The_Making_of_B...