It doesn't matter if a vast majority of people are not rational economic actors. It only takes 1 rational actor with enough capital to take the other side of all the bad bets, and the market will be priced correctly even if the other 99 people are irrational.

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Majromax 2 days ago | parent [-]

'Enough' [capital] is doing a lot of work in that sentence. In the limit of a one-sided irrational market, the 'rational actor' would need to take the other side of every open transaction.

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cortesoft 2 days ago | parent [-]

Yeah, but in the limit of a one-sided irrational market, the rational actor is going to be given as much capital as he can take.

	▲	eru 2 days ago \| parent [-]
		In the long run. In the short run, our rational actor will be constrained by the Kelly criterion, well and whatever outside funding she can raise.