Evaluating the 'Self-Interest' Assumption in Economic Models
An economic model is constructed to analyze the outcomes of an interaction between two individuals: a producer and a second party who controls access to a critical resource. A core assumption of this model is that both individuals act with pure self-interest, meaning they only seek to maximize their own personal payoff and have no regard for the welfare of the other person. Critically evaluate this assumption. In your response, explain one key analytical benefit of making this assumption, and discuss one plausible real-world outcome that this model might overlook as a result of it.
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Ch.5 The rules of the game: Who gets what and why - The Economy 2.0 Microeconomics @ CORE Econ
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The Economy 2.0 Microeconomics @ CORE Econ
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