Glamor Economics

Chapter 11

Chapter 2 Section 4 The Rational Person Assumption in Economics
Economics is a study of how to optimally allocate limited resources.Therefore, both economists and economic theory inevitably start with rationality.There is an interesting little story that reflects the unique perspective of economists.

An economist, a doctor, and a pastor went to play golf together. When they were enjoying themselves, they found that a person was always running aimlessly on the golf course, which seriously affected their interest, so they went to the golf course. management negotiations.The manager of the stadium explained to them: "In order to show love to the disabled in the whole society, the stadium is open to the blind for free on Monday afternoon. Today is Monday, and the person running around is blind. If his behavior affects you, I apologize to you."

After the three listened, they had three different reactions.After hearing this, the pastor was very moved, so he decided to spare a certain amount of time to pray for the disabled for free, praying for God's blessing and bringing the gospel to the disabled.After hearing this, the doctor immediately decided to learn from the stadium, and prepared to set aside a certain amount of time in his clinic to provide free medical services for the disabled.

The economist said disapprovingly: "I don't understand, why don't you change the opening hours for the blind from daytime to nighttime?"

From a rational point of view, there is no difference between day and night for the blind, and changing the opening hours for the blind from day to night will not harm the interests of the blind.If blind people share the golf course with normal tourists during the day, although the interests of blind people can be guaranteed, the interests of normal tourists will be affected.In other words, the interests of the blind are based on the sacrifice of the interests of normal tourists, and the allocation of stadium resources is inefficient.

Economists are rational, and likewise, economic theory is based on rational assumptions.The above story leads to an important concept in economics - rational economic man.Rational economic man is an important assumption in western economics.It can be said that the entire theoretical building of Western economics is built on the basis of this assumption.

Rational economic man, also known as the hypothesis of economic man, assumes that human thinking and behavior are goal-rational, and the only economic benefit they try to obtain is the maximization of material compensation.Adam?A passage in Smith's "The Wealth of Nations" has a relatively clear explanation of the rational economic man: "The food and drink we need every day are not from the favor of the butcher, the brewer and the baker, but from their self-interest. Intention. We don't say things that arouse their altruism, but we say things that arouse their self-interest, and we don't say that we need it, but that it is good for them." Adam?This discourse of Smith shows us that people are in an exchange relationship, and they can get food and drink because the merchants want to get their own best interests.

Bentham, a representative of the utilitarian school, concluded that it is human nature to seek advantages and avoid disadvantages.In economics, "benefit" refers to the benefits and benefits obtained by individuals, which can be expressed in various forms. In the final analysis, it is the utility, happiness, and satisfaction brought to people; The price paid, the cost, the losses and sacrifices suffered, in the final analysis, are the negative effects, deficiencies, and pains brought to people.In economics, ordinary normal people have the behavioral instinct of seeking advantages and avoiding disadvantages, or the characteristics of rational people can be summed up in four words "seeking advantages and avoiding disadvantages".

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Moral man Adam?In The Theory of Moral Sentiments, Smith expounded three other aspects of human nature different from economic man: sympathy, sense of justice (sense of propriety), and altruistic tendencies in behavior.These are manifestations of human morality.Smith's ethical thought was later developed into the "moral man" theory.

Complex man American scientist Degas?Schein first put forward the hypothesis of "complex man" human nature.This theory holds that human beings are not purely economical beings, nor are they complete social beings, but should be complex people who respond appropriately to various situations at different times and places.

The main contents of this theory include:
1. Human needs are diverse, and these needs are constantly changing.

2. Human needs and motivations interact.

3. People's working and living conditions are constantly changing, so new needs and motivations will arise.

4. Because people have different needs, they will respond differently to different management methods.

(End of this chapter)