INTRODUCTION

The marginal productivity of homo economicus is declining. The thin view of the rational actor, whose preferences are well ordered and transitive, who readily calculates many steps forward and single-mindedly pursues the optimization of his own welfare, has been a productive model across many fields. It has formed the basis of mainstream economics, much of contemporary political science, as well as law and economics. It has informed business organization and engineering models. But it has always operated under significant pressure. Some criticism was internal to economics, as Jessica Leight discusses in her essay on the intellectual history of public choice. Mostly, the weight of the other social sciences, literature, critical theory, and philosophy were arrayed against it. The defense of homo economicus has usually been some version of Milton Friedman's argument: The model is justified by the quality of the predictions it offers, not the plausibility of its assumptions.

A large body of empirical work has put homo economicus to controlled tests and field studies. It has shown that simple behavioral model to be less predictive of observable behavior than previously thought. Famous in the legal literature has been observational work on social norms and trust, common property regimes, and, later, experimental behavioral law and economics. The better known aspect of the experimental work has been divergence from the predictions of rationality itself, as Joseph Stiglitz emphasizes in this volume.