Bounded Selfishness
Critique of the Maximizing Behaviour of Consumers and Producers
AO3·HL
Syllabus requirement
Consumers may not always act in pure self-interest; they can show altruism and fairness.
Assessment objectives
AO3 Synthesis and Evaluation
Higher LevelThis topic is assessed at HL.
Summary
This topic explains bounded selfishness as a challenge to the standard economic assumption that agents act only to maximize their own benefit. It presents behavioural economics evidence that people often behave reciprocally and altruistically, performing actions that help others without direct personal gain. Understanding bounded selfishness matters because it affects predictions about consumer and producer behaviour and the design of policies that rely on self-interested optimisation.