Homo economicus  

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Train wreck at Montparnasse (October 22, 1895) by Studio Lévy and Sons.
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Train wreck at Montparnasse (October 22, 1895) by Studio Lévy and Sons.

The term homo economicus, or economic man, is a caricature of economic theory framed as a "mythical species" or word play on homo sapiens, and used in pedagogy. It stands for a portrayal of humans as agents who are consistently rational and narrowly self-interested, and who usually pursue their subjectively-defined ends optimally.

Generally, homo economicus attempts to maximize utility as a consumer and profit as a producer. As a theory on human conduct, it contrasts to the concepts of behavioral economics, which examines cognitive biases and other irrationalities, and another mythical species, homo reciprocans, a model which emphasizes human cooperation). In game theory, homo economicus is often modelled through the assumption of perfect rationality.

The notion of "homo economicus" is often used by non-economists to critique an economic approach. There are distinct concepts involved: the preferences that individuals have among outcomes; and the processes that individuals use to make decisions. The question of whether individuals are in fact able to make the best choices, given their preferences, leads to the economic definition of rationality, or the so-called "rational economic man". This concept of rationality does not restrict what sort of preferences are admissible.

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Unless indicated otherwise, the text in this article is either based on Wikipedia article "Homo economicus" or another language Wikipedia page thereof used under the terms of the GNU Free Documentation License; or on original research by Jahsonic and friends. See Art and Popular Culture's copyright notice.

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