Definition of Homo economicus:
Latin for economic human. A term used in economic theories to describe humans as rational and self-interested beings capable of making judgments towards subjectively defined ends (such as accumulation of wealth and resources). This is used as a basic for the majority of economic models, where they assume that all human beings will act like homo economicus. The validity of this assumption has been questioned in some economic circles, with alternative assumptions proposed.
Homo economicus, or economic human, is the figurative human being characterized by the infinite ability to make rational decisions. Certain economic models have traditionally relied on the assumption that humans are rational and will attempt to maximize their utility for both monetary and non-monetary gains. Modern behavioral economists and neuroeconomists, however, have demonstrated that human beings are, in fact, not rational in their decision making, and argue a "more human" subject (that makes somewhat predictable irrational decisions) would provide a more accurate tool for modeling human behavior.
A hypothetical person who behaves in exact accordance with their rational self-interest.
Homo economicus is a financial term that some economists use to describe a rational human being. .
How to use Homo economicus in a sentence?
- The model is generally used in economics and was first proposed by John Stuart Mills in an 1836 essay defining the characteristics of political economy.
- Homo economicus is a model for human behavior, characterized by an infinite capability to make rational decisions.
- Modern research has proved that the theory of an economic man is a flawed model.
- Using rational assessments, Homo economicus attempts to maximize utility as a consumer and economic profit as a producer.
Meaning of Homo economicus & Homo economicus Definition