How well does he convince you that people are rationally irrational and that by omitting this assumption economics models will continue to be relatively poor models of human behavior and democracy will go on making poor choices - Essay Example

al Affiliation In most of the occasions people have been considered to be upright in their reasoning and the way they do things.This is not always the case as there are a lot of mistakes witnessed which make logicians conclude that there is irrationality. It has been taken that some of the economic models are perfect and are void of any mistakes that they should be considered in depiction of the real economic situation. This has ended up in unexpected eventualities emanating from the assumptions for example, the EOQ model which assumes that the desire and will to own a given product by the consumer remains constant the whole year yet the demand is a subject of fluctuations (Hans, 2002) .

Whenever there is a fluctuation the model no longer gives the exact view of its projection. It therefore lose the confidence and trust which the business may have accorded it. Comparing this situation by the democratic world it fits as the provisions of democracy is always considered the best form of economic system yet it has several loopholes resulting from the freedom in the movement of goods. It is easy to find that there are fluctuations originating from these models. in stock the models always play a significant role.

Most businesses use the model in predicts the decrease and increase in the goods stored by the business. The model is very rigid on the lead time it does not give the space for eventualities. Many are the circumstances where there is a problem with the suppliers who may experience difficulties contrary to the draft and provisions of EOQ. In a case where there is difficulty in supply the model is no longer perfect but will give a wrong impression of what is stipulated in the model. In the democratic economic environment there is a notion that there is free and fair ways in which the business operations are conducted.

It is challenging to find that many of business people who pose to be democratic are going against the ethics and legal requirements put in place to protect the business people en masse. As expected in most of the democratic business world there should be element of free movement of goods and services but this always does not happen because of irrationality by some influential individuals who are considered to poses the highest degree of rationality. Every model or behavior by human beings is a subject of limitations as well as manipulations.

Many influential individuals always take advantage of the flexibility of both models and the behavior of their fellow people to satisfy their interests. With all the evidences experienced by both the business world as well as the society there are many loopholes in what society provides to be the guidance and the normality expected from the people. Many times people do things contrary to what the society provides. This makes us have conclusion that there is no perfection in the business people do.

We are also made to realize that the business models are subjects of mistakes and should not be depended on wholly. Works cited Graf, Hans G. Economic Forecasting for Management: Possibilities and Limitations. Westport, Conn: Quorum Books, 2002. Print.