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Stereotypes are vital for navigating reality and even more vital for navigating a fictional reality where your perception is limited by the narration of the author or game master.
I strongly disagree about stereotypes being useful for navigating reality, and am personally very against the idea that your perception is limited by the narration of an author or game master. I'm generally not a fan of the idea that the narration is even objective, and not just the narrator's opinion of what things are like (and opinions are very much colored by social biases, etc.)Let's ignore the part about using stereotypes to navigate reality because it's a much too broad subject.