ABSTRACT
In this chapter, the authors explore the behavior of individual economic actors—people. They look at both historical perspectives and contemporary research on this topic, and discuss its implications for economic theory. Economics is a social science—it is about people and about how people organize themselves to meet their needs and enhance their well-being. Ultimately, all economic behavior is human behavior. Sometimes institutional forces appear to take over, but if we look closely at economic outcomes, we will find that they are ultimately determined by human decisions. However, the model of economic behavior presented in the chapter reveals that economic actors often do not behave rationally or in their own self-interest, and can be significantly influenced by various factors.
