The Economic Model of Behaviour

Abstract

The purpose of this chapter is to present ‘homo oeconomicus’, i.e. to describe the general model of individual behaviour which is the basis not only for economics but for all approaches of the social sciences which understand human action as rational choice between alternatives.1 The single individual is the unit of the analysis: the individual human being is in the focus of consideration.2 This is a natural starting point for a social science which sees itself as a ‘human science’. Moreover, it corresponds to our occidental tradition which considers – at least since the Enlightenment – the (autonomous) individual as the central point of philosophical and political reasoning.3 It is presupposed that human beings are in a situation of scarcity so that they cannot satisfy all their needs together, at least not simultaneously. 4 The question of how the individual behaves in certain decision situations is the topic of economics.