There actually seems to be somewhat of a Dunning-Kruger like effect when it comes to people evaluation skills. Generally, those who appear the most confident about their people judgements, also seem to be those who are wildly speculative and inaccurate about what other people are thinking.
For example, people tend to be a little lazy, or tend towards 'doing less'. If one could get 100K for sitting on one's butt - most people would take the offer. Some people would rather work, or do something more creative.
This is different from being able to 'read' people.
One ceo may may look at a worker exhibiting stereotypical output of a "lazy" person and decide this person must not care about their work and thus should be fired. Meanwhile another may see this as a symptom of burnout from caring about their work too much and decide the worker should get some time off to relax. Regardless of who's interpretation is correct, it is a decision than can have a big impact on a person.
The behavioural economics approach is definitely worth keeping in mind regardless of people-reading ability, but we should be weary of interpreting such things as being too 'directly applicable' in anything other than very generalized circumstances. Unfortunately, I've seen my fair share of cases like the example I stated above, so it is worth remembering that there is no such thing as "the average person". Not to say there aren't definite patterns of behavior of course, but that's a whole other conversation.
I agree with most of what you say, but I disagree that there isn't such a thing as the 'average person', or rather, we are animals, somewhat predictable, not that unique.
Oh I agree completely, didn't mean to give the impression I advocate the "special snowflake" view of the world either. My apologies! My entire field of research is practically based around our predictability ;)
What I meant to say rather, was that while there are definite behavioural patterns, they tend to cluster into discrete groupings, rather than being broad and generally applicable traits that can be used on everyone across the board in aggregate (i.e. a singular "average person"). There are certainly many 'trivial' human traits we all share in common of course, but I've found those to be less helpful in personal decision making situations than more specific correlated traits. But then again, I might be a bit bias given that's my area of expertise :)