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

January 15th 2025

experimental realism

the extent to which a controlled study is meaningful and engaging to participants, eliciting responses that are spontaneous and natural. See also mundane realism.