I find the EMH to be useful in a similar way when analyzing financial markets. There needs to be a presumption that there are no obvious trades that will make you rich overnight that don’t also have to potential to bust you. From that starting point one can figure out how to best invest given their risk tolerance and future funding needs.
You may find this relevant: Gul, F., & Pesendorfer, W. (2007). Welfare without happiness. American Economic Review, 97(2), 471-476.
I find the EMH to be useful in a similar way when analyzing financial markets. There needs to be a presumption that there are no obvious trades that will make you rich overnight that don’t also have to potential to bust you. From that starting point one can figure out how to best invest given their risk tolerance and future funding needs.