The difference between real people and Homo economicus

Many people have likened the response to Mr. Obama’s appeal for civic engagement to the response to similar appeals by President John F. Kennedy during the 1960s. Then, as now, many economists were skeptical. The Nobel laureate Milton Friedman, for example, began the opening chapter of his 1962 book, “Capitalism and Freedom,” by quoting the already-famous passage from Kennedy’s inaugural address in which he said, “Ask not what your country can do for you, ask what you can do for your country.” Mr. Friedman seemed to find the statement unintelligible, or at any rate not “worthy of the ideals of free men in a free society.”

“The free man,” he wrote, “will ask neither what his country can do for him, nor what he can do for his country.”

From Robert Frank's latest Economic View column titled, "When Self-Interest Isn’t Everything". Here are the opening lines:

Traditional economic models assume that people are self-interested in the narrow sense. If “homo economicus” — the stereotypical rational actor in these models — finds a wallet on the sidewalk, he keeps the cash inside. He doesn’t leave tips after dining in restaurants that he will never visit again. And he would never vote in a presidential election, much less make an anonymous donation of money or time to a presidential campaign.

While on this topic, take a look at Dan Ariely's "Mac vs. PC" style comparison of standard and behavioral varieties of economics.