Concept of homo
Economicus:
- It stands for rational human being
and he always seeks to maximize his utility. It is widely used in
economic theory that human is rational and maximize his utility by
behaving selfishly. All economics decisions are taken by comparing
costs and benefits associated.
Pravalence of Homo
Economicus:
- All economic agents must have
information to take well informed decisions. But in real world,
information is not evenly distributed among the economic agents.
Lack of information or presence of asymmetric information leads to
the economic decisions which are not rational and prudent.
- Further, A.K Sen assumes that Human
should not be judged as narrow minded and selfish.
- Hence, all economic decisions are
not guided by the rational thoughts.