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A Critical Review of Homo Economicus from Five Approaches

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  • 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
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    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).

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