Just as Homo ergasters may have evolved into modern men and women, in contemporary economic theory, the traditional model of Homo economicus is evolving into a modern conception of economic man and woman. Behavioral economists have adapted earlier notions of economic man to capture decision making under the constraints on human rationality, willpower, and self-interest. Some strange behaviors can be traced to rational foundations, but others are sufficiently suspect to warrant policy that addresses the possibility of misinformation, mistakes, and psychosis.

We’ve seen that the information that neoclassical theory treats as fully and freely available is often incomplete and costly. We’ve also seen that market participants do not always put the information they have to its best use. The salient question is whether problems with information justify an abandonment of neoclassical precepts, some revisions and expansions in rational choice theory, or none of the above. Most contemporary economists stake out a middle ground, leaning toward the neoclassical side. Despite their flaws, neoclassical models provide useful guidance and predictive power. Experiments demonstrate that people—not to mention rats, dolphins, and other decision makers broadly defined—generally respond to incentives in rational ways: they all tend to follow the money, cheese, or sardines. That being said, worthwhile improvements in theories and policy making can be achieved by acknowledging psychological influences beyond the desire for money and leisure. Consumers, managers, employees, and all other participants in an economy are more or less flawed, biased, emotional, benevolent, undisciplined, and uninformed, which helps to explain myriad behaviors that neoclassical models do not predict.