Behavioral Economics: The final section in this chapter makes clear the important point that (most) economists realize that the world is not as simple as our models might suggest.  This is, of course, not a damning condemnation of the framework so long as care is and was taken at the outset to highlight the role of modeling in developing and testing theory.  

 

On the other hand, students often find the story of the consumer to be too stylized based on their own experiences and pointing out that the model is not designed to match their experiences is not terribly helpful or convincing.  Behavioral economics helps bridge this gap.   At this stage, a discussion of behavioral issues provides students with the understanding that economists are working on the question of how to improve the model to more accurately reflect reality, while at the same time acknowledging that adding more realism is messy.  The three examples included in this chapter, especially the discussion of the endowment effect, illustrate this tension very nicely.