Does economic theory use the appropriate method to analyze human economic behaviour?

What is it about?

Human beings are complex in their values, preferences, behaviours and choices. They can not be considered as machines and having no variety in their values, preferences, behaviours and choices. The behaviours are shaped by preferences and which are influenced by values. The value system is learnt and taught in different cultures in different ways. The view about life and its purpose has an important influence on preferences. Human beings are malleable and receptive. If they are taught to cooperate, share and have empathy, they will tend to behave in socially responsible ways. Thus, there is no need to have a fixed attachment to pure self-interest in understanding and analyzing human behaviour, especially when this approach has been challenged in the past and also in this study.

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Why is it important?

Human behaviour is important to understand in order to understand the choices and outcomes in the market and in society. This paper presents compelling evidence to support the view that preferences are amenable. The right form of social learning and behaviours can make people more generous, altruist and socially responsible. The pure self-interest approach to analyze behaviour has not only resulted in descriptive failures but has also resulted in making people at least indifferent to ethical dilemmas and paradoxes.

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