Editing Homo economicus (section)

===Economists===
Economists [[Thorstein Veblen]], [[John Maynard Keynes]], [[Herbert A. Simon]], and many of the [[Austrian School]] criticise ''Homo economicus'' as an actor with too great an understanding of macroeconomics and economic forecasting in his decision making. They stress [[uncertainty]] and [[bounded rationality]] in the making of economic decisions, rather than relying on the rational man who is fully informed of all circumstances impinging on his decisions. They argue that perfect knowledge never exists, which means that all economic activity implies risk. Austrian economists rather prefer to use as a model tool the ''[[Homo agens]]''.

Empirical studies by [[Amos Tversky]] questioned the assumption that [[investor]]s are rational. In 1995, Tversky demonstrated the tendency of investors to make risk-averse choices in gains, and risk-seeking choices in losses. The investors appeared as very risk-averse for small losses but indifferent for a small chance of a very large loss. This violates economic rationality as usually understood. Further research on this subject, showing other deviations from conventionally defined economic rationality, is being done in the growing field of experimental or [[behavioral economics]]. Some of the broader issues involved in this criticism are studied in [[decision theory]], of which [[rational choice theory]] is only a subset.

Behavioral economists [[Richard Thaler]] and [[Daniel Kahneman]] have criticized the notion of [[economic agent]]s possessing stable and well-defined preferences that they consistently act upon in a self-interested manner. Using insights from psychological experiments found explanations for anomalies in economic decision-making that seemed to violate rational choice theory. Writing a column in the Journal of Economic Perspectives under the title ''Anomalies'', Thaler wrote features on the many ways observed economic behavior in markets deviated from theory. One such anomaly was the endowment effect by which individual preferences are framed based on reference positions (Kahneman et al., 1990). In an experiment in which one group was given a mug and the other was asked how much they were [[willingness to pay|willing to pay]] (WTP) for the mug, it was found that the price that those endowed with the mug where willingness to accept (WTA) greatly exceeded that of the WTP. This was seen as falsifying the [[Coase theorem]] in which for every person the WTA equals the WTP that is the basis of the [[efficient-market hypothesis]]. From this they argued the endowment effect acts on us by making it painful for us to give up the endowment. Kahneman also argued against the rational-agent model in which agents make decisions with all of the relevant context including weighing all possible future opportunities and risks. Evidence supports the claim that decisions are often made by "narrow framing" with investors making portfolio decisions in isolation from their entire portfolio (Nicholas Barberis et al., 2003). [[Shlomo Benartzi]] and Thaler found that investors also tended to use unreasonable time periods in evaluating their investments.<ref>{{Cite journal |doi=10.2307/2118511 |jstor=2118511 |title= Myopic Loss Aversion and the Equity Premium Puzzle |last1=Benartzi |first1=Shlomo |last2=Thaler |first2=Richard H. |journal=The Quarterly Journal of Economics |year=1995 |volume=110 |issue=1 |pages=73–92 |s2cid=55030273|url=http://www.nber.org/papers/w4369.pdf }}</ref> 

In Kahneman-Tversky’s criticism of the Homo Economicus model, many mainstream economists had utilised deductive logic to further progress the Homo Economicus idea as opposed to Daniel Kahneman and Amos Tversky in which they had applied inductive logic.  Further findings of their experiments that opposed Homo Economicus had found that individuals will constantly adjust their choices according to changes in their income and market prices.  Furthermore, Kahneman and Tversky had conducted experiments exploring prospect theory where results from several experiments concluded that individuals will generally put higher importance on avoiding loss over making a gain.<ref name=Elahi/>
''Homo economicus'' assumptions have been criticized not only by economists on the basis of logical arguments, but also on empirical grounds by cross-cultural comparison. Economic anthropologists such as [[Marshall Sahlins]],<ref>Marshall Sahlins: ''[http://www.eco-action.org/dt/affluent.html The Original Affluent Society] {{Webarchive|url=https://web.archive.org/web/20190724130948/http://www.eco-action.org/dt/affluent.html |date=2019-07-24 }},'' in: Marshall Sahlins (1972''): Stone Age Economics.'' London: Routledge 2003</ref> [[Karl Polanyi]],<ref>Karl Polanyi (1944): ''[[The Great Transformation (book)|The Great Transformation]].'' Beacon Press 2001</ref> [[Marcel Mauss]]<ref>Marcel Mauss (1924): ''[[The Gift (Mauss book)|The Gift]]. The Form and Reason for Exchange in Archaic Societies.'' London: Routledge 2006</ref> and [[Maurice Godelier]]<ref>Maurice Godelier: ''The Enigma of the Gift.'' University Of Chicago Press 1999</ref> have demonstrated that in traditional societies, choices people make regarding production and exchange of goods follow patterns of [[reciprocity (cultural anthropology)|reciprocity]] which differ sharply from what the ''Homo economicus'' model postulates. Such systems have been termed [[gift economy]] rather than market economy. Criticisms of the ''Homo economicus'' model put forward from the standpoint of ethics usually refer to this traditional ethic of kinship-based reciprocity that held together traditional societies. Philosophers [[Amartya Sen]] and [[Axel Honneth]] are noted for their criticisms of the [[The Idea of Justice|normative assumptions]] made by the self-interested utility function.<ref>Archived at [https://ghostarchive.org/varchive/youtube/20211205/4aLjJ2AsEk8 Ghostarchive]{{cbignore}} and the [https://web.archive.org/web/20161212235920/https://www.youtube.com/watch?v=4aLjJ2AsEk8 Wayback Machine]{{cbignore}}: {{cite web| url = https://www.youtube.com/watch?v=4aLjJ2AsEk8| title = Social Freedom, Morality and Markets {{!}} Axel Honneth (2016) | website=[[YouTube]]}}{{cbignore}}</ref>

Swiss economist [[Bruno Frey]], points to the excessive emphasis on [[extrinsic motivation]] (rewards and punishments from the social environment) as opposed to [[intrinsic motivation]]. For example, it is difficult if not impossible to understand how ''Homo economicus'' would be a hero in war or would get inherent pleasure from [[artisan|craftsmanship]]. Frey and others argue that too much emphasis on rewards and punishments can "crowd out" (discourage) intrinsic motivation: paying a boy for doing household tasks may push him from doing those tasks "to help the family" to doing them simply for the reward.