Editing Neoclassical economics (section)

=== Methodological individualism ===
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Neoclassical economics offers an approach to studying the economic behavior of ''homo-economicus''. This theory is based on methodological individualism and adopts an atomistic approach to social phenomena, according to which social atoms are the individuals and their actions.<ref>{{Cite book|last=Heath|first=J.|date=2005|title=Methodological individualism|publisher=Metaphysics Research Lab, Stanford University|url=https://plato.stanford.edu/entries/methodological-individualism/|access-date=April 27, 2021|archive-date=September 30, 2018|archive-url=https://web.archive.org/web/20180930192421/https://plato.stanford.edu/entries/methodological-individualism/|url-status=live}}</ref> According to this doctrine, individuals are independent of social phenomena, but the opposite is not true. Individuals' actions can explain macro-scale behavior, and social collections are nothing more than aggregates, and they do not add anything to its components (Ibid). Although methodological individualism does not negate complex social phenomena such as institutions or behavioral rules, it argues any explanation should be based on constituent components' characteristics of those institutions. This is a reductionist approach based on which it is believed that the characteristics of the social system are derived from the individuals' preferences and their actions.<ref>{{Cite journal|last1=Janaćković|first1=Marko|last2=Petrović-Ranđelović|first2=Marija|date=November 22, 2019|title=Relationship Between Ease of Doing Business Indicators and the Foreign Direct Investment Inflows in the Republic of Serbia|journal=Facta Universitatis, Series: Economics and Organization|pages=269|doi=10.22190/fueo1903269j|issn=2406-050X|doi-access=free}}</ref>

A critique of this approach is that the individuals' preferences and interests are not fixed. The structures contextualize individual's. According to social constructivists, systems are co-constituted alongside the actors, and ideas within the system define actors' identities, their interests, and thus their behavior.<ref>{{Cite journal|last=Corsten|first=Michael|date=March 1998|title=Review Symposium on Searle: John Searle, The Construction of Social Reality. Free Press, New York, 1995. Pp. 241. $25. I. Between Constructivism and Realism—Searle's Theory of the Construction of Social Reality|url=http://dx.doi.org/10.1177/004839319802800105|journal=Philosophy of the Social Sciences|volume=28|issue=1|pages=102–121|doi=10.1177/004839319802800105|issn=0048-3931|s2cid=141750997}}</ref> In this regard, actors in various circumstances (exposed to different impressions and experiences) will construct their interests and preferences differently, both within each other and over time.<ref>{{Cite book|author=Hay, Colin|url=http://worldcat.org/oclc/945766614|title=Political Analysis: a Critical Introduction|year=2002|isbn=978-1-137-24149-8|oclc=945766614}}</ref> Given the individualistic foundation of the economic theory, critics argue that this theory should consider individual action's structural contexts.