The economic behavior of an individual and a group of people in the market forms demand. For the seller’s financial result, it is very important to predict the future demand in a timely manner and determine a list of the main factors that can affect it. That is why it is necessary to understand the concept of "model of an economic person" and, having connected psychological and social aspects to the economic ones, start using this knowledge in practice. They are relevant both for enterprises acting on the supply side of the market, and for ordinary people who collectively provide market demand.
"Homo" simulation or who are we?
Economists have long wondered how people make choices, what they are guided by and how they rank their priorities. With the development of market relations, man himself has evolved. Recall the known types of "homo".
Human models in terms of biology or Homo biologicus :
- Homo habilis or a skilled person, learned to make fire and create means of labor;
- Homo erectus, or upright man, stood on both legs, hands free;
- Homo sapiens or Homo sapiens , acquired the ability to articulate speech and thinking outside the box.
The evolution of people from the perspective of a type of activity and a cause-and-effect being eventful , or Homo eventus :
- Homo economicus or an economic person guided in his behavior by aspects of rationality and achieving the maximum possible benefit in conditions of limited economic resources;
- Homo sociologicus or a social person striving to communicate with other people and to affirm his role in society;
- Homo politicus or political person motivated to strengthen his authority and achieve power through state institutions;
- Homo religiosus or religious person who defines the support in his life and the main motive of “the word of God” and the support of higher powers.
A brief description of the presented simplified models of the event type shows the system of priorities of a person and explains the motives of his behavior in a particular environment - economic, political, social, religious. Each individual can be a person "different" depending on the coordinate system, that is, the environment in which he acts and identifies.
It is interesting to compare the first two event models of people: an economic person is individual, a social person is too collective and dependent on society. The world adapts to the needs of the economic person, which is reflected in the law of supply and demand, and the social person adapts himself to the social trends of the world in order to avoid his separation from the crowd.
Rationality as the basis of profitability
Modeling involves a certain system of assumptions, so a person in economic relations has rationality , that is, he is able to make the right decision in the proposed conditions. The following factors influence human rationality:
- availability of information on prices and volumes of production;
- human awareness of the main parameters of choice;
- high level of intelligence and sufficient human competence in matters of economic choice;
- a person makes decisions in conditions of perfect competition.
The ratio of the above assumptions leads to the fact that rationality can be of three types:
- Full , which implies a comprehensive knowledge of a person about the state of the market and his ability to make a decision, getting the maximum benefit at the minimum cost.
- Limited , which implies a lack of complete information and an insufficient level of competence of a person, as a result of which he seeks not to maximize benefits, but simply to satisfy basic needs in ways acceptable to himself.
- Organic rationality complicates the model of an economic person by introducing additional variables that affect his behavior: legal prohibitions, traditional and cultural restrictions, social parameters of choice.
Representations of man as a rational subject with his own needs and motives evolved along with economic schools. Currently, there are four main models of man. They differ:
- The degree of abstraction from the diversity of social, psychological, cultural and other aspects of a person’s personality.
- Environmental features, that is, the economic and political situation around a person.
I. Model of the economic person - materialist
The concept of “Homo economicus” was first introduced in the 18th century as part of the teachings of the English classical school, and later it migrated to the teachings of marginalists and neoclassicists. The essence of the model is that a person seeks to maximize the usefulness of acquired goods within limited resources, the main of which is his income. Thus, in the center of the model are money and the individual's desire for enrichment. An economic person is able to appreciate all the benefits, assigning each value and usefulness for himself, because when choosing he is guided only by his own interests, while remaining indifferent to the needs of other people.
In this model, the "invisible hand" of the A. Smith market actively manifests itself. People in their activities proceed solely from their own interests: the consumer seeks to acquire the highest quality product, and the manufacturer seeks to offer such a product to the market in order to satisfy demand and make the most profit. People, acting for selfish purposes, work for the common good.
II. Model of an economic person - a materialist with limited rationality
Followers of the ideas of J.M. Keynes, as well as institutionalism, admitted that human behavior is influenced not only by the desire for material wealth, but also by a number of socio-psychological factors. A brief description of the first model allows us to conclude that the person is at the basic levels of the pyramid of needs of A. Maslow. The second model moves a person to higher levels, leaving priority on the material side of being.
To maintain this human model in equilibrium, adequate state intervention is required.
III. Model of an economic person - collectivist
In the system of paternalism, where the state takes on the role of a shepherd, automatically transferring the people to the position of herd sheep, the economic person also changes. His choice is no longer limited only by internal factors, but by external conditions. The state decides the fate of a person by sending to study by distribution, attaching to a specific workplace, offering only specific goods and services. The lack of competition and personal interest in the results of labor leads to dishonesty, dependent moods and a forced stay of a person at the lower levels of the pyramid of needs, when you have to be content with the small and not strive for the best.
IV. Model of an economic person - idealist
In this model, a sensitive economic person appears: the concepts of rationality and benefits for him are refracted through the prism of higher spiritual needs. As a result, it may not be more important for an individual to pay, but the degree of satisfaction from his work, the importance of his work for society, the complexity of his work and the level of self-esteem.
The fundamental difference from the previous models allows us to say that a new economic person has appeared who is equally thinking and feeling, distributing priorities in accordance with his internal state.
Here, the individual has a full range of needs from basic physical to higher spiritual, the most important of which is the need for self-realization. A person is a complex model, his behavior depends on many factors that can be predicted only with a certain degree of error.
Psychological aspects of the behavior of an economic person
All economic problems of a person are connected with a choice in conditions of limited resources. And this choice is greatly influenced by psychological factors. If we again turn to the pyramid of needs mentioned above, we can see what is the role of intangible factors in human behavior. The pyramid includes the following levels:
- The first (basic) - physiological needs for housing, food and drink, sexual satisfaction, rest;
- The second is the need for security on the physiological and psychological plane, the belief that basic needs in the future will be met;
- The third is social needs: to exist harmoniously in society, to be involved in any social group of people;
- Fourth - the need for respect, to achieve success, separation from society according to competency grounds;
- Fifth - the need for knowledge, learning new and putting knowledge into practice;
- Sixth - aesthetic needs for harmony, beauty and order;
- Seventh - the need for self-expression, the full realization of their abilities and capabilities.
Man and society
The manifestation of the social component in human behavior can significantly affect the economy, breaking the usual ideas about the interaction of supply and demand. For example, a phenomenon such as fashion involves the removal of certain trending goods in an increased price range, distorting the ratio of price and quality.
Luxury goods are always in demand, but the purpose of acquiring this category of goods is not to satisfy vital needs, but to maintain the status of the individual, to increase his self-esteem.
Man is a social subject, therefore, always acts in accordance with or contrary to the opinion of others. Therefore, in the modern world, a socio-economic person has appeared who also makes choices in conditions of limited resources, but with an eye to his psychological needs and the reaction of society.
The manifestation of the "economic man" in modern people
Consider the example of an economic person, having solved the everyday problem.
Task : Suppose the economist Ivanov earns 100 rubles. in hour. If you buy fruit at the market for 80 rubles. per kilogram, then you need to spend an hour to go around the market, choose the best product and stand in line. The store sells fruits of good quality and without queues, but at a price of 120 rubles. per kilogram.
Question : At what volume of purchases is it advisable for Ivanov to go to the market?
Solution : Ivanov has the opportunity cost of his time. If he spends it on work in the office, he will receive 100 rubles. That is, in order to rationally spend this hour hike in the market, the savings on price differences should be at least 100 rubles. Therefore, expressing the purchase volume through X, the total cost of fruits sold on the market will be:
80X + 100 <120X
40X> 100
X> 2.5 kg.
Conclusion : It is rational for the economist Ivanov to purchase cheaper fruits in the market in excess of 2.5 kg. If less fruit is required, then it is more rational to purchase them in a store.
The modern economic man is rational, he intuitively or consciously assigns a certain price to everything and chooses from alternative options the one that suits him the most. At the same time, he is guided by all possible factors: monetary, social, psychological, cultural, etc.
So, an economic person ...
Let us single out the main characteristics inherent in the modern economic person (EC):
1. The resources that are at the disposal of ECH are always limited , while some of them are renewable, while others are not. Resources include:
- natural;
- material;
- labor;
- temporary;
- informational.
2. The EC always makes a choice in a rectilinear coordinate system with two variables: preferences and limitations . Preferences are formed on the basis of the needs of a person, his aspirations and desires, and restrictions come from the amount of resources available to the individual. Interestingly, as opportunities grow, human needs also rise.
3. The EC sees alternative choices , is able to evaluate and compare them.
4. When choosing an EC, it is guided solely by its interests , but family members, friends, close people, whose interests will be perceived by a person almost on equal terms with his own, can fall into his zone of influence. His interests can be formed under the influence of a variety of factors, not only material ones.
5. The interaction between socio-economic people with their interests takes the form of exchange .
6. The choice of EF is always rational , but due to limited resources, including information, the individual chooses from the alternatives known to him that which is most preferable for him.
7. ECF may be wrong , but its mistakes are random.
The study of an economic person, his motives for action, his system of values and preferences, as well as the limitations of choice will allow him to better understand himself as a full-fledged subject of socio-economic relations. The main thing is that people become a little more literate in economic matters and make fewer mistakes, systematically improving the quality of life.