Rational

Economics.

Classical economics assumes that all market participants are profit-maximising and risk averse.

This combination of preferences is known as 'rational' in classical economic models such as the efficient market hypothesis.

See also

• Behavioural economics
• Classical economics
• Efficient market hypothesis
• Homo economicus
• Irrational
• Model
• Profit maximisation
• Risk
• Risk averse
• Risk premium