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We are writing a paper about the 'economic man.' By this, we mean that the choices he makes epitomize a rational economic thinker. However, we also acknowledge the fact that there are other, non-economic reasons that people make decisions such as religion. What (if any) literature addresses the idea that even with other considerations, a person will still act rationally in the economic sense. Preferably we would like to have a theoretical model that encases these other choice considerations. Also, we would love to hear whether there are any case studies on this idea.

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  • $\begingroup$ prospect theory $\endgroup$
    – lost
    Feb 18, 2016 at 22:16
  • $\begingroup$ @lost gesundheit $\endgroup$
    – Kitsune Cavalry ♦
    Feb 19, 2016 at 16:59

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Amartya Sen, a 1998 Nobel Laureate, has a well cited article on the subject:

Some other related references:

  • Persky, Joseph. 1995. “Retrospectives: The Ethology of Homo Economicus”. The Journal of Economic Perspectives 9: 221-231.

  • Hargreaves-Heap, Shaun and Martin Hollis. 1987. “Economic Man”. In The New Palgrave: A Dictionary of Economics, vol. 2, ed. John Eatwell, Murray Milgate, and Peter Newman. New York: The Stockton Press.

  • Sen, Amartya K. 1987. “Rational Behavior”. In The New Palgrave: A Dictionary of Economics, vol. 4, ed. John Eatwell, Murray Milgate, and Peter Newman. New York: The Stockton Press.

  • Sen, Amartya K. 2002. Rationality and Freedom. Cambridge, Massachusetts: Belknap Press of Harvard University Press.

  • Simon, Herbert A. 1979. Models of Thought. New Haven: Yale University Press.

I should add that Sen is particularly good with giving people credits. So the bibliography section of his books/articles will surely have many more useful sources on this topic.

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I would point you firstly to work pioneered by the late Gary Becker on applying the principles of economic optimisation to non-market behaviour.

Becker's insight was that the kinds of trade-offs people face when trading goods and services also affect many other kinds of decisions, including things such as criminal behaviour or marriage and family life. For example, Becker modelled criminals as deciding what crimes to commit based on an evaluation of the costs (if caught) against the benefits flowing from the crime's proceeds (whether material or psychological). A list of Becker's papers can be found on Repec.

Becker's style of applying economics to such topics has been influential and there are now huge literatures applying economics to social behaviour of every variety—to the extent that it is hard to even know where to begin summarising such literatures.

At the time of Becker's death, many leading economists wrote articles summarising his impact on the field of economics.

Becker's contribution was recognised with the award of the 1992 Nobel Prize. The citation read

for having extended the domain of microeconomic analysis to a wide range of human behavior and interaction, including nonmarket behavior.

The Nobel press release is here and his Nobel lecture "The Economic Way of Looking at Behavior" was published in the Journal of Political Economy.

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One definition of rationality: Preferences are complete and transitive. This definition suggests that there is no such thing as right or wrong preferences - simply consistent and inconsistent.

So choice theory and utility maximization would explain the scenario you described (MAs Colell's Microeconomic Theory discusses)

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