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Consider the matter from the point of view of someone prescribing
policy. The model is a proposal of how the economics of the
matter in question work. Unless one assumes certainty about how
the economics works, policy and action is impossible. One
proceeds [dare I say it?] as if there is certitude. Action,
necessarily ASSUMES that things are a certain way, or action
becomes impossible. Of course the actor is well aware that
everything is only probable, but at the moment of action the
assumption is that things are definitely a certain way. That
includes the assumption that other actors in the system behave in
a certain way, and, unless specified otherwise, have full knowledge
of the relevant environment of their acts.
The assumption of perfect knowledge is a derivative of the policy
application of Economics
Robin Neill
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