Do you agree there is a difference in behavior between startups and big companies, though? In the way they are willing to invest into something?
If you agree, then how can you say both act rationally?
Why wouldn't rational people who have labor to offer, instead of joining a startup, go work for a big company? The pay is usually better I hear.
Addendum: I am sure you can explain the difference in behavior by invoking "preferences" or "utility" (which is actually meaningless in humans, cf. https://news.ycombinator.com/item?id=13276760, but that aside) of monetary rewards; however, that doesn't explain why there is the difference in the first place. If some entities are rational, they should perceive the world the same way and thus have the same preferences.
>If some entities are rational, they should perceive the world the same way and thus have the same preferences.
This is incorrect. Rational economic behavior is sequence of choices that gives the optimal level utility for the actor. Utility function is given and outside rationality.
Different people have different capabilities and resources available to them. Even if they had different utility functions they would behave differently for the reasons I described above.
Surely the optimal way to proceed when faced with betting on a coin toss is to keep your stake and guarantee you walk away with some money.
Now it may be possible to evaluate the utility of engaging in a start-up and so act rationally in entering in to such an endeavour but I'd warrant that's not how it [ever] happens. Instead it's far more realistic to assume it follows the lottery model: that people's sense of hope, or wishful thinking, makes them choose to play [at lottery, or startups] despite the analysis indicating an alternate choice is most logical. We humans are not creatures of logic.
If you agree, then how can you say both act rationally?
Why wouldn't rational people who have labor to offer, instead of joining a startup, go work for a big company? The pay is usually better I hear.
Addendum: I am sure you can explain the difference in behavior by invoking "preferences" or "utility" (which is actually meaningless in humans, cf. https://news.ycombinator.com/item?id=13276760, but that aside) of monetary rewards; however, that doesn't explain why there is the difference in the first place. If some entities are rational, they should perceive the world the same way and thus have the same preferences.