What Assumptions Shape Our Models of Human Decision-Making?

When building models, a crucial task is to clarify what the "assumptions" are. Assumptions are the premise for discussion and exploration; they determine how we understand and analyze a problem. However, often we think we are discussing the same issue while actually each side is speaking from different assumptions.

Sometimes we fall into a stalemate where each side seems reasonable, but the root of the dispute often lies in differing assumptions: A thinks B acts out of selfish motives, while B insists they act for the public good, preventing resolution.

To solve problems, it is essential to see the assumptions behind them. There is no single correct answer, but the "human nature assumptions" from various disciplines can offer useful perspectives and insights.

1. Economics: Humans are “rational economic agents”

Economists assume humans are rational decision‑makers who strive to maximize their own benefit in every decision. Under this assumption, people precisely calculate costs and benefits of all feasible options and choose the one that best matches their preferences.

This assumption emphasizes how people make ‘optimal choices’ under scarce resources, assuming behavior is fully driven by rationality. For example, consumers weigh price, quality, brand, etc., to select the product with the highest utility.

In modeling we often adopt the ‘rational agent’ assumption because it is relatively easy to quantify and operationalize, allowing us to use various functions and optimization models.

However, the limitation is that it ignores emotions, cognitive biases, and other irrational factors. Behavioral and experimental economics have shown that human decisions are often affected by emotions, habits, and social influences, so real‑world decisions are rarely 100% rational—“Too young, too simple”.

2. Psychology: Humans are “emotion‑driven irrational animals”

Psychologists view human behavior as more emotional, driven by subconscious desires and cognitive biases. Freud suggested many of our actions stem from subconscious conflicts and wishes.

For example, you might dislike a certain food because of an unpleasant childhood experience, even though you know it is healthy—an illustration of the subconscious at work.

Modern psychology studies cognitive processes, exploring why we develop biases, conform, or overestimate our abilities (the Dunning‑Kruger effect). Psychologists argue that irrational behavior is the norm rather than the exception.

In short: “We are far less clear‑sighted and rational than we think.”

3. Sociology: Humans are “products of social relations”

Sociologists argue that behavior does not occur in isolation but is profoundly shaped by social structures, cultural norms, group relations, and interactions. We are not independent individuals but part of a social environment.

The sociological assumption focuses on how society and culture shape individual behavior. For instance, our consumption habits, career choices, and emotional dependencies are influenced by the groups we belong to. Durkheim noted that behavior is not merely individual choice but also a product of social structure and cultural background.

A limitation of this assumption is that it can overlook individual free will and autonomy, overemphasizing social influence.

4. Biology: Humans are “slaves of genes”

From a biological perspective, much of human behavior is determined by genes and physiological mechanisms. Evolutionary psychologists argue that many behaviors and emotional responses evolved to aid survival and reproduction.

Biologists explain emotions such as fear and love through evolutionary mechanisms—fear helps avoid danger, love promotes reproduction and parental care.

However, this view can overemphasize genetic determinism and neglect social, cultural, and individual agency.

5. Computer Science: Humans are “information processors”

Computer scientists view the human brain as an information‑processing system that receives, processes, and outputs information. Our thinking and decision‑making are complex information‑processing activities.

In the brain, input is processed and transformed into behavior. Learning resembles programming, memory resembles storage, and thought processes are akin to computation. This assumption emphasizes cognition and information flow.

Different disciplinary assumptions provide distinct lenses and tools for understanding human behavior. Economics stresses rational choice, psychology highlights emotion and bias, sociology examines social and cultural influence, biology focuses on genes, philosophy stresses free will, anthropology looks at cultural differences, and computer science uses information processing to understand cognition.

Each discipline’s assumption has validity and limitations. A “perfect” assumption is impossible, but we can select or propose relatively reasonable assumptions and refine them through empirical experience to approach a more realistic model of humanity. (Author: Wang Haihua)