In economics, can first principles replace the rational agent hypothesis?

In my opinion, these two are fundamentally different things, so it's not about one replacing the other. They are more like two tools with different purposes in a toolbox.

You can understand the "rational agent hypothesis" this way: it's like a cornerstone of the economic edifice. Early economists, in order to build a theoretical framework, first had to assume "what the 'builders' (i.e., us) are like." They thought, "Let's simplify it: assume everyone is fully aware, knows exactly what they want (e.g., the more money, the better), and always makes choices that maximize their own benefit." This is the "rational agent." Is this assumption entirely correct? Certainly not, but it's very convenient. It helps us establish many basic economic models and explain many phenomena. It's a "target" set up for the convenience of modeling.

So what is "first principles thinking"? It's not an assumption, but a way of thinking. Simply put, it means "getting to the bottom of things." Instead of caring what others say or what existing models look like, you directly ask: "What is the most fundamental, underlying logic of this matter?" Just like Elon Musk building rockets, he didn't think, "Rockets have always been expensive." Instead, he asked, "How much do the raw materials for building a rocket (aluminum, copper, iron) actually cost?" By starting from the most basic material costs, he realized that the cost of rockets could be significantly reduced. It's a "weapon" to challenge and scrutinize whether the "target" is accurate.

So you see, one is a "target" set up for the convenience of modeling (the rational agent hypothesis), and the other is a "weapon" to challenge and scrutinize whether this "target" is accurate (first principles thinking).

For example, traditional economics, using the "rational agent hypothesis," states that stock prices should reflect all information, and markets are efficient. But an economist thinking with first principles (like a behavioral economist) might say, "Wait, are people really rational?" They would start from more fundamental levels like psychology and sociology, discovering that people have herd mentality, fear of loss, overconfidence... these are the more "first-principle" human behavioral rules. Based on these new principles, they can build new models that better explain why stock markets surge and plummet, and why bubbles occur.

To summarize: First principles cannot directly "replace" the rational agent hypothesis because they serve different functions. However, we can use first principles as a way of thinking to examine and challenge the rational agent hypothesis, and then propose a new hypothesis that is closer to reality and more insightful. One is an "old map," and the other is a "compass for exploring new worlds."