Redefining the Economic Agent: A Psychological Approach

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The main intent of this article is to investigate the social nature of an economic agent in a realistic setting of the market. After a methodical and detailed reading of the classical writings by Adam Smith, Marx Weber and John Stuart Mill, it is found that apart from rationality, various other social factors have been talked about in their respective economic models, which would be discussed herein. All of the three economists believed that economic agents and their actions depend highly on the social, cultural and moral frame inside which they operate. In light of this, I re-consider the classical economic man as a model man and use the ideas from philosophy and psychology to redefine and reinterpret the definition of an economic man. There are two important ideas discussed in this article. First, the economic man need not maximize his utility, instead he merely satisfy his needs both on the basis of monetary as well as psychic income. Second, the essence of rationality, lies in choosing the ways to satisfice. An economic man can satisfy his expectations only when he seeks out new methods wisely to achieve them and not by choosing the best available option given to him at that moment. This way, contemplating the problem from the economist’s and philosopher’s point of view, will enable us to idealize the economic man, which is a standard way of thinking in the philosophy of science. The knowledge gained by this article will help us to understand the fundamental and primal necessities, required for the development of any new economic agent model.

Posted for comments on 21 Apr 2022, 3:26 pm.

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