If you could create such a model, you'd become very rich of course if you put your money where your mouth is and you are correct. These type of contrarian investors exist (i.e. black swan investors). The problem is that their funds lose money every year, year over year, and people think they are crazy until some unforseen crisis hits and they become "prescient" all of the sudden.
In game theory there is more and more research pointing towards ambiguity and how people deal with that. Ambiguity is defined as sourced of probability which are generally unknown but people still prefer one over the other. A well known example is the Ellsberg paradox [0]. In this paradox there are two turns, one contains 50 red and 50 black balls and the other contains 100 balls of unknown proportion of red/black. People often prefer to bet on the known urn (even on complmentary bets) leading to probabilistic contradictions (i.e. probabilities stop summing to one)
There's also a lot of research on behavioral finance and in particular behavioral macro, these models show that even with only a small number of heterogenous agents you can create chaotic models ...
The point I'm trying to make is that we, as economists create models, based on certain assumptions, that seem to work well, until they don't.
In game theory there is more and more research pointing towards ambiguity and how people deal with that. Ambiguity is defined as sourced of probability which are generally unknown but people still prefer one over the other. A well known example is the Ellsberg paradox [0]. In this paradox there are two turns, one contains 50 red and 50 black balls and the other contains 100 balls of unknown proportion of red/black. People often prefer to bet on the known urn (even on complmentary bets) leading to probabilistic contradictions (i.e. probabilities stop summing to one)
There's also a lot of research on behavioral finance and in particular behavioral macro, these models show that even with only a small number of heterogenous agents you can create chaotic models ...
The point I'm trying to make is that we, as economists create models, based on certain assumptions, that seem to work well, until they don't.
[0] https://en.wikipedia.org/wiki/Ellsberg_paradox