Rational Choice

Rational Choice Theory

 Also known as choice theory or rational action theory.

 Rational choice theory is one of many positivist theory that try to explain human behavior in terms
of utility maximization.

 It is considered as a normative and empirical theory of individual and also a formalized logical
structure that serve as a foundation of deep conceptualizing in political science and economic.

 Rational means people act based on or in accordance with the reason or logic.

-Based on reason and not on feelings or emotion.

 Choice refers to an act of selecting or making a decision when faced with two or more
possibilities.

 When applied to economics, this means that people estimate the probable costs and benefits of
any action before deciding what to do.

 In Political theory it is built on two-fold initial beliefs that explaining individual behavior is the key
to understanding the functioning of the political institution and that these behaviors can be
magnified can understand the behavior of the group, hence understanding the society.

 Structural functionalism- structures and the functions they are perform are considered
important for the smooth functioning of society.

 Rational Choice Theory- it is individual choices and how they affect society which are considered
are more important

 When applied to Social Interaction, it takes the form of exchange theory.

 Basic to all forms of rational choice is the assumption that complex social phenomena can be
explained in terms of the elementary individual action of which they are composed (Scott, 2000).

 In general, Rational Choice is used to predict social consequences of decision making based on
scarcity.

Historical Context

 The beginning of rational choice can be traced to the age of reason (Oppenheimer, 2oo8).

 In Thomas Hobbes’ leviathan,(1651), he tried to explain the basic functioning of political institution
through individual choices.

 Adam Smith emphasized the likely social functionality of Hobbes’ simplifying notion of egotism,
when he asserted in his “Wealth of Nations” (1776) that “it is not from the benevolence of the
butcher, the brewer, or the baker that we expect our dinner, but their regards to their own
interest.

 In the 1960s, American sociologist George Homans was credited for establishing the rational
choice in sociology when he formulated the basic framework of exchange theory which was
grounded for assumptions drawn from behaviorist psychology.
  Late on, more formula mathematical models of rational action were develop, converging with
trends in microeconomics.

 Rational choice has been used to explain themes such as voting, coalition formation, ethnic
relations, social mobility, class reproduction, crime and marriage.

Key concepts in rational choice theory

 According to sterling professor of political science at Yale University Ian Shapiro and professor of
political science at Columbia university Donald green, there are basic assumptions of rational
choice theory such as utility maximization, structure of preferences, decision making under
conditions of uncertainly, and the certainly of individuals in the explanation of the collective
outcomes (Green and Shapiro, 1994). Utility maximization refers to patterns of behavior in
societies wherein the choices made by the individuals are governed by the maximization of
benefits and minimization of costs.

 Structure of preference refers to the idea that people are motivated by their personal desires and
aspirations but since it is not possible for them to attain all of the things that they want, they must
make choices related to their goals and the means of attaining those goals. According to British
sociologist John Scott, in rational choices theory individuals must predict the outcomes of
alternatives courses of action and calculate which will be best for them (Scott, 2000). It sees social
phenomena as caused by the actions of individuals, while individual actions can also be explained
by psychological responses.

 They are both shaped by rewards and punishments encountered. The determining factor in human
behavior is reinforcement through rewards and punishments, also known as conditioning.

 Decision making under conditions of uncertainly means that each individual takes advantage of
the likely worth of his own payoff. Decision making, according to rational choice often takes place
under conditions of uncertainly since the focus is on the expected rather than actual usefulness.
Centrality of individuals in the explanation of group outcomes means that rational choices
theorists believe the it is by reference to the maximizing actions of individuals that group
outcomes must be explained. Social phenomena can be explained in terms of the individual actions
that led to those phenomena.

Thinker and their Contributions

 Gary Becker

 His major contribution was perhaps the ability for having extended the realm of
microeconomic investigation to a board extent of human behavior and interaction such as
discrimination, crime and punishment, human capital, families and organ market.

 George Homans

 Considered as the pioneer of rational choice.

 His theoretical contribution was the formation of the more integrated social science on a
firm theoretical basis and developed the deductive and indeductive approaches to theory.

 His exchange Theory posits the belief that individual beings and behavior are pertinent to
comprehending society, that is, people will perform an action depending on their insight on
the likelihood of success.

Rational Choice Theory: Strengths and Criticisms

STRENGHTS

 Generality- it is the most general theory of social action which can be used to understand all
human behavior.

 Parsimony- a principle to which an explanation of a thing or event is made with the fewest
possible assumptions.

 Predictive, that decisions of individuals depend on the structures and assumption.

CRITICISMS

 One issue would be the difficultly encountered by individuals to make decision in case of
inadequate information and uncertainty.

 Human social action and interactions are complex in rational choice theory may not be able to
explain all of the complexities.

 The difficulty of explaining macro level structures and institutions simply from the models of
individual social action.

 It’s assumption that almost everything human do is rational is problematic, since not all human
actions are rational.