Welcome, friend and future deep-dweller!
This is the seventh monologue episode of Deeponomics—a podcast exploring the research, deep ideas, and theories shaping markets, finance, and accounting.
In this episode, we ask: Who does the Representative Agent really represent? We explore the simplification at the heart of many economic models—a single fictional individual standing in for millions. Why is this figure so dominant, and what do we lose when we model economies this way?
References:
Arrow, K.J., 1986. Rationality of self and others in an economic system. Journal of Business, 59(4), pp.S385–S399.
Brock, W.A. and Durlauf, S.N., 2001. Discrete choice with social interactions. Review of Economic Studies, 68(2), pp.235–260.
Kirman, A.P., 1992. Whom or what does the representative individual represent? Journal of Economic Perspectives, 6(2), pp.117–136.
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