Homo Economicus is a model human behaviour in Economics

Homo Economicus is a model human behaviour in Economics

One of the main points of criticism of the economic perspective, a behavior, acceptance is! Behind the action-model of Homo Economicus are certain basic assumptions, with the help of which human behavior is explained and predicted to be

. To begenen to this perspective, it is critical that you must understand:

The action model of Homo Economicus include:

  • the individual principle,
  • the principle of problem orientation,
  • the principle of the separation between preferences and restrictions,
  • the rationality principle,
  • the principle of Non-case-viewing,
  • the principle of methodological individualism

Individual principle

The individual principle says that the individual himself is interested in. It pursues its own objectives, which are to be accepted as a given. The Homo Oeconomicus has spoken – very neutral, a utility function or preferences. Possible problem solutions are only evaluated against the Background of these given preferences. An assessment of the preferences (of the individual) benefits by the other is not possible.

Principle of problem orientation

The decision model is formed problem. It is believed that the Homo Oeconomicus is able to model the preferences and the Alternatives for a decision problem is relevant, complete and correct, and that he can therefore model each choice problem correctly.

The principle of the separation between preferences and restrictions

The Homo Oeconomicus is facing with its given internal preferences of an external field of action, which influenced his choice (restrictions). From the Interplay between his preferences and the current conditions, he chooses the optimal action. It is observed a Change in the actions, then it is routed only back to the Change of external constraints, while the internal preferences (the utility function) are considered to be stable. If someone is drinking less alcohol than in the past, then of the Economist, explains the by increasing the alcohol prices (Change in the restrictions), and not by a growing health consciousness of the Person (Change the preferences). How preferences emerge and change, of no interest to the Economists in the rule.

Rationality principle

According to the rationality principle, the individual must try to make the optimum use of the maximum decision-making between alternative options. Moral Considerations play no role. The individual does not shy away from lies, breach of contract, fraud and other rule breaks, if it brings him personal benefit. The conditions in the field change of the Homo Oeconomicus has to react in a predictable way with adaptation decisions. The Economics can explain his behaviour, nor to predict if he behaves “irrationally” and for example. in spite of the increase in the price of a Good habit, the same quantity consumed.

For the identification of the Homo Oeconomicus enough in principle, if he is making a great effort to act in a rational (intended to be rational or limited rational Action), even if he does not know all Alternatives and their consequences carefully.

Principle of Non-individual viewing

The very strict assumption of rational behaviour is also giving way to this, that such behavior is not expected of any individual in any Situation, but only as a border essentially, the behavior of most actors. The rational behavior, however, must be clearly dominant if the Economics don’t want to lose their explanatory and predictive power for the practice. The Homo Economicus is the ideal type, although a work of fiction. Such an ideal is a value-less design would be but if not accepted could be that the human behavior is in fact with a certain frequency this model.

The principle of methodological individualism

All of the properties of the social systems (groups, companies, families, businesses, etc.) to be awarded, must be made of the individual characteristics and behavior of the actors involved to explain. In particular,

according to the methodological individualism, only individuals ‘ intentions and goals are attributed to. So there is e.g. no goals or strategies of the Company, but only individual objectives and strategies of people in the company.

Anyone who wants to implement his goal, with potentially conflicting objectives

other expect. The Homo Economicus chooses, for given preferences and constraints is always the Alternative that promises the highest (material) Benefit.To Changes in the restrictions he fits rational.

The two main basic assumptions for economic Action are, therefore, rationality and the pursuit of utility maximization.

This post is an excerpt from the new book on corporate ethics.

Homo Oeconomicus – das Modell menschlichen Verhaltens in der ÖkonomikHow can be implemented the business ethics as a Management responsibility? A stronger orientation of the corporate guide on the guiding principle of a life-serving economy is more and more demanded. Elisabeth Gödel discusses the philosophical foundations of ethics and clarifies the relationship of ethics and Economics. The focus is on the institutionalisation of ethics is on the level of the individual company.

>> Link to book

>> Link to the Service book

>> Link to the slides for lecturers

>> Link to the editorial