rational-economic man

a construct introduced in the work of Scottish economist Adam Smith (1723–1790): The rational-economic man makes decisions based on the rational analysis of potential and desired outcomes and acts in his (or her) own rational self-interest. This assumption lies behind the classical economic theories of capitalism and the classical political philosophies of liberalism. Its influence can also be seen in psychology, most theories and models of which assume a human being capable of reason and highly motivated to act out of self-interest. Recent research suggests that people are often ruled more by emotional and cognitive biases than by rational self-interest when making economic and other decisions. See eudemonism; hedonism. See also behavioral economics; bounded rationality.

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Psychology term of the day

February 20th 2025

principle of constancy

in classical psychoanalytic theory, the idea that all mental processes tend toward a state of equilibrium and the stability of the inorganic state. Also called constancy law; law of constancy. See also death instinct; nirvana principle.