CONCEPT OF ECONOMIC MAN ,CHARACTERISTICS

 THEORY's OF ECONOMIC MAN - 

                            THE CONCEPT OF HOMO ECONOMICUS TO ECONOMIC MAN IN ECONOMIC GEOGRAPHY , RATIONAL ECONOMIC MAN's MOTIVATIONAL MODEL ECONOMIC MAN'S RATIONAL BEHAVIOUR,  CHARACTERISTICS,SIGNIFICANCE AND WEAKNESS

                                                                                            

                       "The Economic Man" is A model of human behavior assumed by economists  in analyzing market behavior. The term "economic man" (also referred to as "Homo economicus") refers to an idealized person who acts rationally, with perfect knowledge and who seeks to maximize personal Utility or satisfaction.. The economic person is a rational person who attempts to maximize the utility received from his/her monetary outflows and sacrifices.The Economic man Concept was first concived by Scottish Classical Economists Adam Smith On his book "An Inquiry into the nature and causes of Wealth Of Nations",1776.  On 1844 John Stuart Mill "Essays on Unsettled questions in political economy" had came up with Neo Economists Man's Perspectives & make the primary assumption of these theory more eleborate.

Evolution of Economic Man Concept  - 

                                                         The idea that human beings are rational creatures whose behaviors are explainable through mathematics has its roots in the European enlightenment of the 18th and 19th centuries. Many assumptions built into the idea of the "economic man" were first developed by early thinkers like René Descartes and Gottfried Wilhelm Leibnitz and then later, Jeremy Bentham and John Stuart Mill. "On the Definition of Political Economy; and on the Method of Investigation Proper To It" from 1830, Mill argues that the study of political economy is not a study of applied politics.

               Mill doesn't deny that human beings may have emotions and motivations outside of the pursuit of material wellbeing. However, those properties of a human being should be left out of the study of economics so that it can be more deductive and logical. The idea of "stripping" a human being to a bare essence in order to get to a central truth is a key component in the initial creation of the economic man.In this formulation, economic man does not have to act morally or responsibly; he doesn't even need to act rationally from the perspective of an outside observer. He only needs to act in a way that allows him to attain pre-determined, narrow goals at the lowest possible cost.

                                                  Economists in the late 19th century—such as Francis Edgeworth ,Leon Walrus,William Stanley,Carl Manger,Vilferdo Pareto   —built mathematical models on these economic assumptions. In the 20th century, the "Rational Choice Theory"  of  Lionell Robinns came to dominate mainstream economics. The term "economic man" then took on a more specific meaning: a person who acted rationally on complete knowledge out of self-interest and the desire for wealth.

                               

CHARRACTERISTICS OF ECONOMIC MAN

                  To explain a phenomenon scientists often build models, and to build these models, scientists have to make assumptions that simplify reality. In economics, one of those simplifying assumptions is a person who is fundamentally rational in economic situations.Unlike a real human,Profit Maximise supporter economic man always behaves rationally in a narrow self-interested way that maximizes his or her satisfaction. 

          “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.”

           ― Adam Smith, The Theory of Moral Sentiments (1759)

Rational Economic Man or Homo Economicus is a Hypothetical concept A Model Man of Economics.Actually they are Homo Reciprocans who wants to behave and perform in commmon market ratonally & wants to make profit i.e Maximising utility with at a short end minimum expenditure.The common characteristics of Economic Man Are discussed under schematic diagram below,

                                

                                  ARE YOU A HOMO-ECONOMICUS !!!!!

     oh! It is best useful to ask yourself Atfirst

• Are you rational?
• Do you know what you want?
• Do you act to maximise your utility?

      The honest answer is probably that ‘sometimes we are, sometimes we are not.We all have many elements of irrational behaviour but we still try to make the best of our situation.Usually when we act we are probably thinking we are doing the right thing. If we give to charity, we do so because we get happiness from the act. However, there are also times when this narrow economic assumptions fails to explain our behaviour. There are stronger bonds of family, society, and notions of spirituality which cause us to make decisions in a way which don’t reflect the model of homo economicus. But, if you are studying economics, rational economic man provides a starting point to build theories and ideas from.

Rational Economic Man's Goals,Functionalities or Performation in Reality 

   Peoples are motivate by Money & making a Profit.Individuals are always making Products & Logical Decisions because of achiving a Highest Self interest termed as Benifitor Satisfaction.Actually the main  goal of Economic man is More Benifits From short costs.In this Systematic Process they defining Problems and Evaluating another for Optimal Solutions.

Alternatives Demand.- If we assume rational economic man, with ordered preferences, we can make assumptions on how changes in price will lead to changes in demand. Using a linear demand curve – with a higher price we would expect lower demand.

Model of perfect competition.- This model assumes firms are profit maximisers and will respond to changes in price and super-normal profit. It also assumes consumers are rational and seeking to maximise self-interest i.e. buying for the lowest price.

Individualism.- The basic Principles of Economic man is Individualism.Individuals are rational,They can think in a separate Logical Way,Individuals have a interests.We can also say Different People have Different Choice or Interests,which also define or influence their utilities.So Individuals can always make a choice to enhance their more utilities. 

Role of incentives.- If man is motivated by financial gain, it suggests a free-market where individuals are rewarded for productivity will lead to a more efficient economy. It is a motivation for a policy like Privetisation. The argument is that if firms have a profit incentive, the managers will endeavour to cut costs and make more profit than if the firm was collectively owned.

CRITICISMS OR LIMITATIONS

Economists are aware of the deficiencies of using the model of the economic man as a basis for economic theories. However, some are more willing to abandon the concept than others. One obvious problem is that human beings don't always act "rationally."

1. Complex Theory - Behavioural economists suggesting man has many biases and examples of irrational behaviour.The concept assumes that the options faced by economic man offer obvious differences in satisfaction. But it is not always clear that one option is superior to another. Two options may enhance a person's utility, or satisfaction, in two different ways, and it may not be clear that one is better than the other.
2. Illogical - Economic man's Concept was criticised as Inadequate, Uncertain, Illogical by Neo Keynsian's Theorists.Because Human social actions, interraction are complex in this theory. 
3. Against of Quality World - Man is not always self-interested but can act on basis of altruism and from the perspective of community/society.Self Uniformity,Satisfaction,Freedom,regional utility may combined cause Detached Regionalism.
4. Reciprocity. If someone does a favour to us, we like to return the favour. Similarly, if someone hurts us, we may want to get a kind of revenge – even if it leads to loss of personal utility.Gandhian approach always Suggests Prosperity and to be mankind.
5. Bounded rationality – individuals lack sufficient knowledge and so make best guesses based on limited information.
6. Extrinsic motivation - The model places too much emphasis on extrinsic motivation – profit, higher wages more goods. In reality, we are motivated by intrinsic motivation. For example, giving to charity can give a ‘feel-good factor’. This can make it rational to give away wealth.
7. Home sociologicus approach - Many decisions we take are developed and framed within the concept of society we live. Hence, we vote to gain social approval, even though from a strictly limited perspective it is not rational to bother.
8. Against of Society and Mankind - Gift giving is an important aspect of social interaction.We offer support to the community with the expectation this will lead to an improvement in the welfare for others.i.e QGIS free Software,Linux karnwell Operating system,Richard Stallman's GNU free software are specially distribute for students,community.So man is not always self motivator but they are always kind and willing to develop the Society.