Homo Economicus v/s Homo Sapiens

Homo Economicus v/s Homo Sapiens

There is a power in the stories we tell.

The power of the story of the human being as a rational agent with a selfish drive for maximizing subjective utility shapes the way future leaders make monetary choices. However, in today’s knowledge economy embedded in complex global ecosystems, working in alignment with how the brain works could help optimize the functioning and wellbeing of all stakeholders. This seminar is an introduction to a human-centered story of economic decision-making.

There is a big divide between the assumptions about how we choose to allocate money perpetuated by the economists (homo economicus) and how we decide according to the research in neuroscience and psychology (homo sapiens).

Here, I reverse some axioms still taught in business courses:

  • the underlying assumption of why we decide (to maximize subjective utility vs. to forage and reproduce);
  • the constraints on the neural processes in decision making (economic rationality vs. biologically-limited computational rationality);
  • how our brains evaluate options and define value (‘’value for money” vs. subjective and adaptive signaling in the brain’s reward circuit);
  • how decision-making processes are carried out in the brain (expected value computation vs. role of emotions and anticipatory affect).

Keywords: neuroscience, motivation, reward, risk, moral value, neuroforecasting.