Maybe I had pretty biased professors, but in my study of economics, there was no standing assumption that individuals are rational.

Rationality is an observation of aggregate behavior, rather than individual. This is pretty robustly observed. It is interesting because this is in spite of the glaringly obvious observation that most people are not rational at all times (though many people are sometimes rational). Thus it is a useful abstraction to reason about rational individuals, though I have never been exposed to a serious claim in academic economics that individual human beings are rational.

The interesting results of behavioral economics are many, but they primarily give us proof of the already-known fact that individual humans are often irrational. The interesting part is not that humans are individually irrational, but how.

Behavioral economics makes the observation of aggregate rationality even more interesting, because many irrational actors can cause aggregate rationality.

If you would like my musing about how it is that what I have said above is so often misunderstood, then I have some thoughts below.

In my academic experience, all of my intro level professors took pains to ensure we understood that we were learning useful models, and that rationality is an observed phenomenon in aggregate. My intermediate level professors often didn't take as many pains to make this clear, but did make similar explanations. For anything 300-level or above, we never really discussed this topic, as the professors assumed we had already learned such.

Based on my observations, I would guess that most people who do not take a full course load of intro and intermediate economics do not have drilled into them that rationality is not something we expect of individuals, despite it having a lot of explanatory power in aggregate observations.

Additionally, as with all fields, those who practice often forget what is taken for granted in the field. Among economists, unless one has significant experience teaching economics to beginners, I expect it is not a common thing to preface every statement with the type of 101-level introductory remarks that would help to remove such confusion.

Additionally, economics seems to me to be plagued with jargon that are homonyms with common words in the vernacular. E.g. "cost" to a layperson often means "value denominated in currency, which I might pay to someone to acquire a specific good or service" or "the amount my supplier paid for the thing I am purchasing, such that their cost is less than the price that supplier charges me", whereas to an economist, "cost" is pretty much always going to mean "opportunity cost"[0], which is the value (to the entity making the choice) of the next best alternative. This sort of homonymity is rampant in economics jargon.

Finally, there is a pervasive assumption in economic thinking of "ceteris paribus", or "all other factors being held constant" (technically "all else equal", but give me some leeway in the translation to capture intent a bit better). Most theories, models, and statements in economics are going to be statements about a single factor/observation with a magical "nothing else can or will change" condition applied to the entire universe. This is, obviously, a huge over-simplification, but one that is useful for discussion.

In summary, all models are wrong, but some are useful. Economists often discuss in terms of models and the way they discuss uses words you think you understand but you don't, unless you study economics (not a dig, just a truthful observation of laypeople using jargon - see a recent SMBC for non-economics examples[1]).

[0]: https://en.wikipedia.org/wiki/Opportunity_cost - Key excerpt:

> Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure or any other benefit that provides utility should also be considered an opportunity cost.

[1] http://www.smbc-comics.com/comic/physical-analysis