Theories of human action

Arild Vatn

Chapter 9 in Rethinking Ecological Economics, 2026, pp 147-160 from Edward Elgar Publishing

Abstract: Our understanding of human action is crucial for how to create a sustainable society. This chapter discusses different theories of human behavior. Neoclassical economics is built on the ‘economic man’ perspective. This person is a solitary utility maximizer with given/fixed preferences. The contrasting social human from institutional theory is first of all multi-rational. It may act according to what is best for the individual, but also what is best for one's group (solidarity) or for others (altruism). Hence, there is a distinction between individual and social rationality. Moreover, people's values and preferences are socially constructed to a large extent. Humans become human through socialization. Institutional structures – e.g., the market versus the community or the consumer versus the citizen – define what rationality is expected. Changing human action therefore does not have to happen only through changed incentives. Changing what values and rationality are emphasized through changing institutional structures offers a more powerful route to sustainability.

Keywords: Economic man; Social human; Individual rationality; Social rationality; Institutions as rationality contexts (search for similar items in EconPapers)
Date: 2026
ISBN: 9781803921839
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