1. A minor deletion gives:

An interesting sidelight is that someone replicated the human experiments on
rats and found..... Rat choice

2. I've not gone through the literature on experimental economics, but whether
the deviations are important depends on the context. People are poor at
calculating long shots and otherwise handling risk -- lotteries are under
standard assumptions irrational. At the same time, people are without doubt risk
averse in many situations. The simple utility model accounts for the latter, but
not the former.

This reflects a larger issue. Models are deliberate simplifications of reality.
What you assume away will depend on what you are trying to model.
The experimental work has been useful in highlighting when the assumptions of
the simple utility model are not innocuous -- but the fact that is not _exactly_
the way people behave is not in itself a useful criticism, because any model (or
for that matter, any limited perspective on reality) has that fault.

3. In reading through the discussion of rat choice, one distinction is that
economists are trained to be aware of these subtleties, and when we talk among
ourselves that shows up all the time. Not surprisingly, the purest "rat choice"
models are in this sense naive economics. At the same time, when economists talk
to outsiders, they tend to ignore all these sorts of subtleties -- after all,
it's pretty hard to communicate all the qualifications and have anything of the
core message survive. A lot of economics is, if you will pardon my saying this
as an insider, surprisingly robust. The law of comparative advantage (systematic
patterns of what is traded), for example, has reasonable explanatory power even
in looking at the Soviet Union in the old days. And the development paths of
various economies show lots of parallels, despite differing cultures and
institutions, including presence / lack of "industrial policy" -- albeit for
political reasons the areas that receive protection etc are also quite
similar....

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Michael J. Smitka
Associate Professor of Economics
Washington and Lee University
Lexington, Virginia 24450 USA
(540) 463 - 8625 Tel & Voicemail
(540) 463 - 8639 Fax
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