History News Network | The Myth of the Rational Actor

Isn’t it time that we get rid of this crazy myth! Susan J. Matt thinks that historians can help undermine this myth. She says: “It is time we recognize that rationality is an elusive quantity, defined and redefined by social habit and market forces, and that rational man is a chimera. His purported behavior has not held steady across the centuries, nor has his personality. Yet economists have clung to this abstraction because he is a convenient factor in their equations. Robert Heilbroner remarked, “Mathematics has given economics rigor, but alas, also mortis.” To breathe new life into their studies, economists should create a new homo economicus—one who acts on more than self- interest and whose emotions change over time. Such a creature may not fit into math equations as easily as the rational actor did, but he will more accurately reflect how and why individuals make the economic choices they do.”

History News Network | The Myth of the Rational Actor.

Homo Economicus

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s