There's a very good reason for why economics developed the way it did, and that is that in many situations, the assumption that people will exploit the opportunities available to them is very plausible, and it simplifies the analysis of how markets will behave.
Interpretation
The quote highlights the rational behavior of individuals in economics, emphasizing that assuming people will take advantage of opportunities simplifies market analysis.
Daniel Kahneman explains that the development of economic theory is rooted in the assumption that individuals act in self-interest by exploiting available opportunities. This assumption, while not universally true, offers a practical framework for understanding market behavior, making it easier to analyze economic scenarios and predict outcomes.
In practice
In a lecture on economic theories, one might quote Kahneman to discuss rational behavior in markets.
We think, each of us, that we're much more rational than we are. And we think that we make our decisions because we have good reasons to make them. Even when it's the other way around. We believe in the reasons, because we've already made the decision.
The average investor's return is significantly lower than market indices due primarily to market timing.
Banks are run by executives, and executives protect themselves, and that does not always mean that banks are going to behave rationally.
Laziness is built deep into our nature.
Through some combination of culture and biology, our minds are intuitively receptive to religion.
You are more likely to learn something by finding surprises in your own behavior than by hearing surprising facts about people in general.
Man's main task in life is to give birth to himself, to become what he potentially is. The most important product of his effort is his own personality.
Humility is just as much the opposite of self-abasement as it is of self-exaltation. To be humble is not to make comparisons. Secure in its reality, the self is neither better nor worse, bigger nor smaller, than anything else in the universe. It is ? is nothing, yet at the same time one with everything. It is in this sense that humility is absolute self-effacement.
A man is as much affected pleasurably or painfully by the image of a thing past or future as by the image of a thing present.
One of the most misleading representational techniques in our language is the use of the word 'I.'
The dice of God are always loaded.
As a rule it is circumstances that make men.
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