Homo economicus

less like robots acting only as economics expects us to act and more like the more or less irrational beings we are. As Swiss economist, Bruno Frey put it, “The agent of economic theory is rational, selfish, and his tastes do not change.” The Homo Economicus, whom psychologist Daniel Kahneman refers to as “Econs” focuses on rationality to understand how choices are made; however, Kahneman was determined to prove rationality is not always the be-all and end-all of economics. Daniel Kahneman is…

Qur'an, Islamic jurisprudence, traditions of the Holy Prophet (SAW), mysticism, social, political and economic issues. We can divide his economic thoughts into five main categories: 1 His views on the economic philosophy of Islam. a) Homo Islamicus and Not Homo Economicus Ibn al-Qayyim highlights the basic Islamic faith that every man is accountable before Allah (SWT) for his conduct and that Allah (SWT) is the source of guidance and direction. Ibn al-Qayyim emphasises the Islamic view…

Although it can be argued that there are no set boundaries to what Political Economy (PE) is (Watson, 2005, p.1), it can be inferred simply from its name that PE is a field which deals with the relationships between the spheres of politics and economics. These two concepts can be seen as being linked. However, interconnectedness does not necessarily mean analytical concurrence and the field of PE does not always regard the interconnectedness as an axiom. Moreover, the field of PE is often…

“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes 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, p.47) Introduction A million little incidents happen every day when people make choices that are not in their interest-for the sake of family, friends or even complete strangers. Be it in the…

Summary In Dan Kahneman’s an Israeli-American psychologist notable for his work on behavioural economics, stated in his book, “Thinking Fast and Slow,” that the brain has two systems. These systems are referred to as System 1 “The Fast Thinker” and System 2, “The Slow Thinker”. System 1 operates automatically, intuitively, involuntary, and with little or no effort. System 2 however, operates slowly. It requires slowing down to deliberate, solve problems, reason, complete complex computations,…

landlessness among the vast majority of the rural population and a high and unsustainable population growth rate explains the reason for the migration from Bangladesh to India (economic push factors). Under these conditions, the rational human being ‘homo economicus’ would make a rational decision to insure himself against risks in income. However one observed fact on the theory of migration, difficult to explain by the postulates of the neo classical theory is that a large majority of the…