Model of humans as rational, self-interested agents
This article is about the economic concept. For the journal, see Homo Oeconomicus.
The term Homo economicus, or economic man, is the portrayal of humans as agents who are consistently rational and narrowly self-interested, and who pursue their subjectively defined ends optimally. It is a wordplay on Homo sapiens, used in some economic theories and in pedagogy.[1]
In game theory, Homo economicus is often (but not necessarily) modelled through the assumption of perfect rationality. It assumes that agents always act in a way that maximize utility as a consumer and profit as a producer,[2] and are capable of arbitrarily complex deductions towards that end. They will always be capable of thinking through all possible outcomes and choosing that course of action which will result in the best possible result.
The rationality implied in Homo economicus does not restrict what sort of preferences are admissible. Only naive applications of the Homo economicus model assume that agents know what is best for their long-term physical and mental health. For example, an agent's utility function could be linked to the perceived utility of other agents (such as one's husband or children), making Homo economicus compatible with other models such as Homo reciprocans, which emphasizes human cooperation.
As a theory on human conduct, it contrasts to the concepts of behavioral economics, which examines cognitive biases and other irrationalities, and to bounded rationality, which assumes that practical elements such as cognitive and time limitations restrict the rationality of agents.
^Zak, Paul J. (2010-12-16). Moral Markets: The Critical Role of Values in the Economy. Princeton University Press. p. 158. ISBN 9781400837366. Retrieved 22 June 2018.
^Rittenberg and Tregarthen. "Chapter 6" (PDF). Principles of Microeconomics. p. 2. Retrieved June 20, 2012.
The term Homoeconomicus, or economic man, is the portrayal of humans as agents who are consistently rational and narrowly self-interested, and who pursue...
benefit for themselves. This concept stands in contrast to the idea of homoeconomicus, which states the opposite theory that human beings are exclusively...
in the least. The neoclassical economic model of a person is called Homoeconomicus, describing a person who "interacts in society without being influenced...
as shown by the homoeconomicus principle; however, it has been shown that human populations are more “benevolent than homoeconomicus” and therefore rarely...
In addition to the generally accepted taxonomic name Homo sapiens (Latin: 'wise man', Linnaeus 1758), other Latin-based names for the human species have...
established in 1983 as an occasional series concerned with aspects of the Homoeconomicus concept. The founding editor-in-chief was Manfred J. Holler (University...
mathematical economics is that of the rational individual actor – Homoeconomicus (lit. 'economic man'). In this model, the individual seeks to maximize...
methodology of other social sciences, especially of economics. For example, homoeconomicus is the result of a consistent abstraction-idealization process. One...
underdeveloped tissue Fermi problem, efforts to produce very broad estimates Homoeconomicus, a hypothetical rational person Naïve physics, also called folk physics...
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consequently assumed that the individual is self-interested or being homoeconomicus. Here, the individual comes to a decision that maximizes personal advantage...
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required Alpha–beta pruning Decision theory Flipism Frame problem Homoeconomicus Optimism bias Overchoice Perfect is the enemy of good Portmanteau Principle...
theory is a useless concept for understanding human behavior; the term homoeconomicus (economic man: the imaginary man being assumed in economic models who...
pointed out that the underlying normative benchmark of nudging is still homoeconomicus, despite the proponents' claim to the contrary. It has been remarked...
precursors, I argue, was not a narrow understanding of the human as homoeconomicus, but the belief that a functioning competitive market required an adequate...
successful. He called for replacing the perfect rationality assumptions of homoeconomicus with a conception of rationality tailored to cognitively limited agents...
rational choice theory. Many heterodox schools are critical of the homoeconomicus model of human behavior used in the standard neoclassical model. A...
dictator game, have been taken as both evidence for and against the Homoeconomicus assumptions of rational, utility-maximizing, individual decisions....
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Dynamic stochastic general equilibrium Factors of production Game theory Homoeconomicus Market price Lucas aggregate supply function Lucas critique Lucas island...
the book, Sen makes a radical break with the traditional notion of homoeconomicus, or 'rational economic man' as motivated mainly by self-interest. He...
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