Word: economicus
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Dates: during 2000-2009
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...homo economicus: a theoretical human being who rationally calculates the costs and benefits of every action before making a decision, used as the basis for a number of economic theories and models...
Behavioral economics doesn't ignore the market forces that were all-powerful in Econ 101, but it harnesses forces traditionally consigned to Psych 101. Behaviorists have always known we don't really act like the superrational Homo economicus of the neoclassical-model world. Years of studies of patients who don't take their meds, grownups who have unsafe sex, and other flawed decision makers have chronicled the irrationality of Homo sapiens. Some of our foibles are quite specific, like overvaluing things we have, overeating food in larger containers and overestimating the probability of improbable events - the quirk that made...
...significantly to the human race, we English concentrators pause to issue our own call to our Ec-favoring brethren. “Ponder your futures!” we cry. “Are you in it for the Rolexes and the squash club membership? Or does the homo economicus make your heart quiver with rapture? The time has come to choose! Given the state of the economy, you probably won’t be making six figures anyway. You might as well study what you love. So if you don’t lie awake at night dreaming...
...Although Greenspan’s analysis referred specifically to financial markets, it also restates a valuable historical lesson about politics: If we expect what is reasonable, we will be disappointed. At least in the financial world, models are more helpful, because despite the inexistence of a homo economicus, most people in most circumstances are driven by profit maximization. They may not know how to achieve it at all times, but they always want better results for their portfolios. When it comes to politics, however, for better or for worse, motivations more often transcend rational concerns...
...trouble with Homo economicus is that he has really very little to do with his emotional, dim-witted half brother Homo sapiens, who bought Petsmart.com on a hunch. It's difficult to imagine Homo economicus upset and off to the mall for some "retail therapy." He doesn't make impulse buys. And he doesn't always know or care what he wants, let alone what he can afford. "The bursting of the Internet bubble may have been the final nail in the coffin of the efficient-market hypothesis," says Richard Thaler, a professor at the University of Chicago...