Homo Economicus

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Homo Economicus

A person that desires to maximize his/her needs or desires. Homo economicus is used most of the time to refer to the rational economic actor, who desires wealth, does not desire to work if it can be avoided, and is able to find ways achieve those ends. This assumption is accepted by many economists, especially those who follow rational choice theory, but it remains controversial. The concept of homo economicus was developed by utilitarian thinkers, and contrasts with the constructs of behavioral economics.
References in periodicals archive ?
It postulates that rational investors will pay no more for an investment in the subject business than they would have to pay for a similar investment, if available.
In terms of age , education level and income, rational investors are found among the age group of 26-45 years with high percentage of individuals being post graduate (nearly 24 percent) and earning above 40000 p.
We examine the predictions for both rational investors and for investors with a behavioral bias against annuity purchases.
Rational investors will completely understand that specific ground rules for this kind of constructive engagement with board member-insiders must be established in advance, and adhered to during discussions.
Investors who are overconfident, who also make their decisions based on private and public information but who place more importance on their private information than rational investors do.
In a rational expectations environment, rational investors make statistically optimal decisions in a world in which they possess all relevant structural information.
Furthermore, any "reliable" signal of an imminent stock market collapse would become useless the moment a large number of people heeded it, since any rational investors would sell their investments in response to the activation of said signal.
That people frequently do not behave like rational investors is not trivial.
perspective of so-called rational investors who rely primarily on
As much as finance professors talk about rational investors and efficient markets, it's emotions--hope, fear, and greed--that drive day-to-day market action.
In two recent papers, with Tuomo Vuolteenaho and with Christopher Polk and Vuolteenaho, I have argued that long-term rational investors who hold an equity portfolio may perceive value stocks as relatively risky despite their low market betas.
However, for ADRs of Asian and South American firms, magnitude of the stabilizing arbitrage positions taken by rational investors is insignificant.