Corporations act somewhat rationally in aggregate only because the people in charge of them are bound to do so by law. And even this breaks down when the corporation is directly run by one person who also owns it.

"Market participants" is not what we're talking about. "Market participants" includes corporations and other forms of organizations that impose strict controls on their own behavior. We're talking about humans. And humans are very irrational. They're just also very good at rationalizing their irrational behavior and prefer doing things they can rationalize.