"Consumer irrationalism" - Libertarian's worst nightmare or nothing to speak of?

[Leaper]

I was perusing Slashdot recently and came across the following quote:

(Amazingly, even economists are now coming to grips with the fact that they’ve overestimated consumer rationalism. The models that they built on such assumptions don’t seem to reflect reality… and the hot new trend in economics research is consumer irrationalism. This is not a troll comment - it’s an observation by my stepfather, who is a macroeconomist at a local university. This, by the way is good news: I’m hoping that it’s the start of a revolution in economic thinking - that consumers can’t protect themselves from market consolidation and monopoly abuse… which is why America now has. like, two competitors in every profitable market.)

Coming from a message board with leanings like that of Slashdot’s, I was quite surprised. I tried Googling the subject, but came up empty.

So tell me: what is this trend? Does it really exist? Is it really “hot”? What meaning would it have for such philosphies as libertarianism (I really don’t know enough about its core to know if it would really have an impact), politics, and so on?

[cynic]

The trend is called Behavioral Economics, and it’s now mainstream enough that Daniel Kahneman, one of the pioneers in this field of research, was awarded the Nobel prize in economics last year.

R.I.P., homo economicus.