Homo Economicus at Work

The economic man (homo economicus) is a rational decision maker with complete information. It’s easy to write academic papers when you don’t have limitations of irrationality or information asymmetry, but it doesn’t really reflect reality.

Enter the information age.

Smartphones, Google, social networks, deep web apps, artificial and assisted intelligence, big data, and so much more created an ecosystem that empowers us, individually, with more complete information than ever throughout history.

Enhanced connectivity further removed each individual from industrial age social structures, thus enabling the contract economy.

Therefore, we are exponentially closer to the academic model of a rational economic decision maker than we were just 10 years ago. This may be why it’s so hard for the talking heads to explain or predict economic movements in the prior cycle.