The myth of rational self-interest

Continuing the last post, the following is from "Framing 101":

"There is another myth that also comes from the Enlightenment, and it goes like this. It is irrational to go against your self-interest, and therefore a normal person, who is rational, reasons on the basis of self-interest. Modem economic theory and foreign policy are set up on the basis of that assumption.

"The myth has been challenged by cognitive scientists such as Daniel Kahneman (who won the Nobel Prize in economics for his theory) and Amos Tversky, who have shown that people do not really think that way.*

"Nevertheless, most of economics is still based on the assumption that people will naturally always think in terms of their self-interest.

"This view of rationality comes into Democratic politics in a very important way. It is assumed that voters will vote their self-interest. Democrats are shocked or puzzled when voters do not vote their self-interest."

* Wiki on prospect theory:

"Contrary to the expected utility theory (which models the decision that perfectly rational agents would make), prospect theory aims to describe the actual behavior of people. [...] An important implication of prospect theory is that the way economic agents subjectively frame an outcome or transaction in their mind affects the utility they expect or receive."