Homo economicus
From The Art and Popular Culture Encyclopedia
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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.
See also
- Agent (economics)
- Consumer confusion
- Dictator game
- Economic rationalism
- Economism
- Homo biologicus
- List of alternative names for the human species
- Modern portfolio theory
- Pirate game
- Post-autistic economics
- Profit motive
- Rational agent
- Rational choice theory
- Rational pricing
- Rationality
- Spherical cow
