IDEAS home Printed from https://ideas.repec.org/a/bla/ajecsc/v78y2019i1p63-93.html
   My bibliography  Save this article

A Critical Review of Homo Economicus from Five Approaches

Author

Listed:
  • Dante A. Urbina
  • Alberto Ruiz‐Villaverde

Abstract

Neoclassical economics is based on and structured around the notion of homo economicus. The theory of consumer choice, the theory of the firm, industrial organization, and welfare theorems all require the assumption that agents act in accordance with the scheme of individualistic rational optimization. In this context, our contribution is threefold. First, we delimit the notion of homo economicus according to five characteristics or dimensions. Second, we critically review this anthropological scheme from five distinct approaches, namely, behavioral economics, institutional economics, political economy, economic anthropology, and ecological economics. Third, we conclude that the scheme of homo economicus is clearly inadequate and deficient. However, despite its inadequacies, it remains one of the fundamental pillars of the neoclassical paradigm in economics, which allows us to discuss why we have not yet overcome this paradigm.

Suggested Citation

  • Dante A. Urbina & Alberto Ruiz‐Villaverde, 2019. "A Critical Review of Homo Economicus from Five Approaches," American Journal of Economics and Sociology, Wiley Blackwell, vol. 78(1), pages 63-93, January.
    • Handle: RePEc:bla:ajecsc:v:78:y:2019:i:1:p:63-93
    DOI: 10.1111/ajes.12258
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ajes.12258
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ajes.12258?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ernst Fehr & Simon Gächter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
    2. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
    3. Malcolm Rutherford, 2001. "Institutional Economics: Then and Now," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 173-194, Summer.
    4. Joseph Henrich, 2001. "In Search of Homo Economicus: Behavioral Experiments in 15 Small-Scale Societies," American Economic Review, American Economic Association, vol. 91(2), pages 73-78, May.
    5. Balmann, Alfons & Valentinov, Vladislav, 2016. "Towards a Theory of Structural Change in Agriculture: Just Economics?," 149th Seminar, October 27-28, 2016, Rennes, France 246420, European Association of Agricultural Economists.
    6. Miettinen, Topi & Kosfeld, Michael & Fehr, Ernst & Weibull, Jörgen, 2020. "Revealed preferences in a sequential prisoners’ dilemma: A horse-race between six utility functions," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 1-25.
    7. Bowles, Samuel & Gintis, Herbert, 1988. "Contested Exchange: Political Economy and Modern Economic Theory," American Economic Review, American Economic Association, vol. 78(2), pages 145-150, May.
    8. Theofanis Papageorgiou & Panayotis G. Michaelides, 2016. "Joseph Schumpeter and Thorstein Veblen on technological determinism, individualism and institutions," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 23(1), pages 1-30, February.
    9. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, June.
    10. Hodgson, Geoffrey M., 2012. "From Pleasure Machines to Moral Communities," University of Chicago Press Economics Books, University of Chicago Press, number 9780226922713, October.
    11. Leibenstein, Harvey, 1978. "On the Basic Proposition of X-Efficiency Theory," American Economic Review, American Economic Association, vol. 68(2), pages 328-332, May.
    12. Euclid Tsakalotos, 2005. "Homo economicus and the reconstruction of political economy: six theses on the role of values in economics," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 29(6), pages 893-908, November.
    13. Bastien, Carlos & Cardoso, Jose Luis, 2007. "From homo economicus to homo corporativus: A neglected critique of neoclassical economics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(1), pages 118-127, February.
    14. Joseph Persky, 1995. "The Ethology of Homo Economicus," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 221-231, Spring.
    15. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    16. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
    17. Samuel Bowles & Herbert Gintis, 2000. "Walrasian Economics in Retrospect," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(4), pages 1411-1439.
    18. Gintis, Herbert, 2000. "Beyond Homo economicus: evidence from experimental economics," Ecological Economics, Elsevier, vol. 35(3), pages 311-322, December.
    19. Jan K. Brueckner, 2000. "Urban Sprawl: Diagnosis and Remedies," International Regional Science Review, , vol. 23(2), pages 160-171, April.
    20. John Gowdy & Jon D. Erickson, 2005. "The approach of ecological economics," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 29(2), pages 207-222, March.
    21. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
    22. Faber, Malte & Petersen, Thomas & Schiller, Johannes, 2002. "Homo oeconomicus and homo politicus in Ecological Economics," Ecological Economics, Elsevier, vol. 40(3), pages 323-333, March.
    23. Chapagain, A.K. & Hoekstra, A.Y. & Savenije, H.H.G. & Gautam, R., 2006. "The water footprint of cotton consumption: An assessment of the impact of worldwide consumption of cotton products on the water resources in the cotton producing countries," Ecological Economics, Elsevier, vol. 60(1), pages 186-203, November.
    24. Bowles, Samuel, 1985. "The Production Process in a Competitive Economy: Walrasian, Neo-Hobbesian, and Marxian Models," American Economic Review, American Economic Association, vol. 75(1), pages 16-36, March.
    25. Morgenstern, Oskar, 1972. "Thirteen Critical Points in Contemporary Economic Theory: An Interpretation," Journal of Economic Literature, American Economic Association, vol. 10(4), pages 1163-1189, December.
    26. Samuel Bowles & Robert Boyd & Colin Camerer & Ernst Fehr & Herbert Gintis & Joseph Henrich & Richard McElreath, 2001. "In search of homo economicus: Experiments in 15 small-scale societies," Artefactual Field Experiments 00068, The Field Experiments Website.
    27. Samuel Bowles & Herbert Gintis, 1993. "The Revenge of Homo Economicus: Contested Exchange and the Revival of Political Economy," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 83-102, Winter.
    28. Andrew P. Vayda, 1967. "On the Anthropological Study of Economies," Journal of Economic Issues, Taylor & Francis Journals, vol. 1(1-2), pages 86-90, June.
    29. Geoffrey M. Hodgson, 2000. "What Is the Essence of Institutional Economics?," Journal of Economic Issues, Taylor & Francis Journals, vol. 34(2), pages 317-329, June.
    30. Esther-Mirjam Sent, 2004. "Behavioral Economics: How Psychology Made Its (Limited) Way Back Into Economics," History of Political Economy, Duke University Press, vol. 36(4), pages 735-760, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bliss, Sam & Egler, Megan, 2020. "Ecological Economics Beyond Markets," Ecological Economics, Elsevier, vol. 178(C).
    2. Just, David R. & Jiao, Jie, 2024. "Using Multiple Methods to Improve Validity," 2024 Annual Meeting, July 28-30, New Orleans, LA 345097, Agricultural and Applied Economics Association.
    3. Metehan COMERT, 2023. "Changing the Course of Tax Narrative: Relationality Sociality and Postcapitalist Possibilities," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 73(73-2), pages 645-674, December.
    4. Espín, Antonio M. & Correa, Manuel & Ruiz-Villaverde, Alberto, 2022. "Economics students: Self-selected in preferences and indoctrinated in beliefs," International Review of Economics Education, Elsevier, vol. 39(C).
    5. Rodrigue, Michelle & Romi, Andrea M., 2022. "Environmental escalations to social inequities: Some reflections on the tumultuous state of Gaia," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 82(C).
    6. Miragaya-Casillas, Cristina & Aguayo-Estremera, Raimundo & Ruiz-Villaverde, Alberto, 2023. "University students, economics education, and self-interest. A systematic literature review," International Review of Economics Education, Elsevier, vol. 43(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Levine, Jordan & Chan, Kai M.A. & Satterfield, Terre, 2015. "From rational actor to efficient complexity manager: Exorcising the ghost of Homo economicus with a unified synthesis of cognition research," Ecological Economics, Elsevier, vol. 114(C), pages 22-32.
    2. Onyeiwu, Steve & Jones, Robert, 2003. "An institutionalist perception of cooperative behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 32(3), pages 233-248, July.
    3. Altman, Morris, 2014. "Insights from behavioral economics on how labor markets work," Working Paper Series 3466, Victoria University of Wellington, School of Economics and Finance.
    4. Michel Zouboulakis, 2010. "Trustworthiness as a Moral Determinant of Economic Activity: Lessons from the Classics," Forum for Social Economics, Taylor & Francis Journals, vol. 39(3), pages 209-221, January.
    5. Maarten Voors & Eleonora Nillesen & Philip Verwimp & Erwin Bulte & Robert Lensink & Daan van Soest, 2010. "Does Conflict affect Preferences? Results from Field Experiments in Burundi," HiCN Working Papers 71, Households in Conflict Network.
    6. Jimena Hurtado, 2005. "The Utilitarian Foundations Of The Economic Approach To Human Behavior," Documentos CEDE 3633, Universidad de los Andes, Facultad de Economía, CEDE.
    7. Venkatachalam, L., 2008. "Behavioral economics for environmental policy," Ecological Economics, Elsevier, vol. 67(4), pages 640-645, November.
    8. Kumar, Pradeep & Kant, Shashi, 2016. "Revealed social preferences and joint forest management outcomes," Forest Policy and Economics, Elsevier, vol. 72(C), pages 37-45.
    9. Jacobs Martin, 2016. "Accounting for Changing Tastes: Approaches to Explaining Unstable Individual Preferences," Review of Economics, De Gruyter, vol. 67(2), pages 121-183, August.
    10. Cardenas, Juan-Camilo & Ostrom, Elinor, 2004. "What do people bring into the game? Experiments in the field about cooperation in the commons," Agricultural Systems, Elsevier, vol. 82(3), pages 307-326, December.
    11. David Blandford, 2010. "Presidential Address: The Visible or Invisible Hand? The Balance Between Markets and Regulation in Agricultural Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 459-479, September.
    12. Altman, Morris, 2014. "Insights from behavioral economics on how labor markets work," Working Paper Series 18843, Victoria University of Wellington, School of Economics and Finance.
    13. Gunnar Brandt & Agostino Merico & Björn Vollan & Achim Schlüter, 2012. "Human Adaptive Behavior in Common Pool Resource Systems," PLOS ONE, Public Library of Science, vol. 7(12), pages 1-9, December.
    14. Philip Keefer & Stephen Knack, 2008. "Social Capital, Social Norms and the New Institutional Economics," Springer Books, in: Claude Ménard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, chapter 27, pages 701-725, Springer.
    15. Singh, Neera M., 2015. "Payments for ecosystem services and the gift paradigm: Sharing the burden and joy of environmental care," Ecological Economics, Elsevier, vol. 117(C), pages 53-61.
    16. Fehr, Ernst & Hoff, Karla, 2011. "Tastes, castes, and culture : the influence of society on preferences," Policy Research Working Paper Series 5760, The World Bank.
    17. Dohmen, Thomas, 2014. "Behavioral labor economics: Advances and future directions," Labour Economics, Elsevier, vol. 30(C), pages 71-85.
    18. Gowdy, John M., 2008. "Behavioral economics and climate change policy," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 632-644, December.
    19. Tobias Hahn & Noël Albert, 2017. "Strong Reciprocity in Consumer Boycotts," Journal of Business Ethics, Springer, vol. 145(3), pages 509-524, October.
    20. Margit Osterloh, 2007. "Psychologische Ökonomik: Integration statt Konfrontation," Schmalenbach Journal of Business Research, Springer, vol. 59(56), pages 82-111, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ajecsc:v:78:y:2019:i:1:p:63-93. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0002-9246 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.