The challenge is that many of our models for economics and finance assume an informed person making rational decisions. Not all people have access to the same information or choose to do the research or have the same capacity to understand the information. (I just had an uber driver who used to be a math professor specializing in probability. He went on to put together lottery programs for several states. I guarantee my approach to finance and stocks is rudimentary at best compared to his - and would be no matter how much research I did). And that's without getting into the rational part your post so eloquently discusses.