The problem is that it's not always clear that people are being irrational. Take the planning falacy. Is it bias, or is it politics? Your boss and / or customer might say they want accurate estimates, but when you give them, they say "that's not good enough". Before long, you implicitly know this, adjust your estimates, and hope for the best. You'll just make excuses and ask for forgiveness later. Now this isn't great business, and is an irrational system, but the individual players might all be acting rationally. I wish I had a better example where the bias / "irrational behavior", was purely rational. They do exist in other cases, but I can't think of any fire yours.

> Of course no one assumes people make perfect decisions 100% of the time

Actually, a lot of economists assume exactly that, call it "revealed preference"[0] and then claim that people are lying when they complain about it.

0: https://en.wikipedia.org/wiki/Revealed_preference

That's something a bit different and doesn't mean that. A revealed preference means that, if you say you never eat donuts, but when observing your behavior we see you buying and eating donuts, then we know that you actually do eat donuts.

A bias, on the other hand, is if we ask sometime if you want to eat 2 or 3 donuts, and you answer 2, but then after further studies, we see that the amount you eat depends on, say, the size of the plate in front of you, then we know that there's something influencing your decision which you may not be aware of and which theoretically speaking "shouldn't" influence your decision.

Revealed preferences don't mean that everyone makes perfect decisions all the time. It just means that, if you want to find out what people actually want, then the best way to do it is to observe what they actually do.

The other advantage is that revealed preferences tend to be fairly rational. Not 100% and there are systemic issues in them, to be sure, but they're often quite good. In fact I'd say they're reliably better than their criticisms.

That is, given a revealed preference and someone claiming they've identified a bias, I start from the presumption the revealed preference is actually rational and the explanation of the bias is wrong, because, well, the article is clearly correct. I see it online all the time. There's a bias bias, the presumption that if someone explains why something is biased, that's it, case closed, no further analysis needed. I see that bias in myself. It's hard to overcome, which is why I (try to) start by presuming the revealed preference is correct.

People's explanations of their revealed preferences are, by contrast, hot steaming garbage. People are terrible at explaining their reasons. So terrible that I think it actually plays into bias bias, because if you take people's explanations seriously they sound incredibly irrational, so it's merely a matter of trying to explain their irrationality. It seems so fruitful. But while studying patterns in rationalization is probably an interesting topic of its own, studying rationalization shouldn't be confused for studying what people do. In general, I (try to) start out by discarding someone's claimed reasons for doing something, unless they do a very good job of convincing me they're actually good at introspection and have made an at least halfway serious attempt at it.

There is value in understanding our biases. Yes, I think it is fair to call them biases but not necessarily irrational--in the longterm.

People are complex psychological creatures and this whole issues of irrational or rational behavior is compounded by the fact that people can /learn/ system 2 patterns of thinking so well that they become system 1 patterns. Those are essentially habits.

So with your rational mind, it is worth identifying any biases you want to codify in your system 1 brain to minimize cognitive costs. But that's an option. And I think we have that option because there is a giant tradeoff between spending time and energy thinking versus getting a good enough result (out of the many decisions and processes we have to carry out each day).

(With respect to the planning fallacy, I suppose there are benefits to underestimating the time it will take. If projects are really much harder than expected, it may never be emotionally worth starting them because they are too monumental. So we have a bias that makes us more optimistic so we actually start doing stuff which helps us in the long run. What I mean is that you can spin it as a good thing. It may be a wrong intellectual assessment, and sometimes that matters immensely, but it is also quite possibly rational for humans to have this bias because it helps them get more stuff done. I'm not a behavior economists or a psychologist, to be fair.)

Irrational isn't merely wrong. You can be rational, and still wrong, beucase you didn't have all the necessary information. Irrational is wronger than wrong - it means making a wrong decision despite having adequate information, or making a wronger decision than what the information you had should allow.