Rational Choice Theory

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Activity Theory, Criminology, Social Sciences, Sociology, Game Theory, Crime Pre-
vention

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Rational Choice and Organization The-

ory
M. Zey, in International Encyclopedia of the Social & Behavioral Sciences, 2001

Rational choice theory is based on the premise of individual self-interested util-

ity maximization. Organizational theory is based on the premise of efficient
functioning of organizations through means/ends rationality within organizations.
Organizational economic theory, which consists of transactions cost economics and
agency theory, forms an indirect link between rational choice theory and organiza-
tional theory. However, transaction cost economics and agency theory differ in their
grounding premises. Transaction cost theory holds to the premise of organizational
theory that organizational rationality dictates that organizations are efficiently
designed means/ends mechanisms, in some cases more efficient than markets,
and finds the rational choice theory premise of individual self-interested utility
maximization is problematic under conditions of uncertainty and asset specificity.
Agency theory holds to the premise of rational choice theory that individuals are
self-interested utility maximizers, but finds the organizational theory premise, that
organizations function efficiently, is problematic. Thus, economic organizational
frameworks, which purport to link micro-level rational choice theory to meso-or-
ganizational theory are unable to do so, due to the incompatibility of the premises
on which rational choice and organization theory rest. As one set of premises are
assumed, the other becomes problematic. No organizational theory has successfully
integrated RCT and OT.

> Read full chapter

Rational Choice Theory in Sociology
Vincent Buskens, in International Encyclopedia of the Social & Behavioral Sciences
(Second Edition), 2015

Introduction
Rational choice theory is a theoretical framework commonly used in various social
sciences including economics, political sciences, and sociology. While in economics,
rational choice theory has become the dominant paradigm, this has not been the
case in sociology. On the contrary, rational choice theory has been widely criticized
for its unrealistic assumptions, lack of empirical testing, and limited empirical valid-
ity (cf Green and Shapiro, 1994; Goldthorpe, 2000). While some of these criticisms
are related to misconceptions of the interpretation of rational choice theory, others
have been seriously taken up by researchers in the field. This has led to more research
in which rational choice theory construction is combined with a variety of empirical
tests. The Handbook of Rational Choice Social Research (Wittek et al., 2013) provides
an extensive and recent overview of the literature in this area including theoretical
advancements as well as a wide variety of empirical applications of rational choice
social research. The handbook is not particularly restricted to sociology, but illus-
trates research and applications in economics, political science, and history as well
(see Kroneberg and Kalter, 2012 for another recent review focusing on Europe and
Hechter and Kanazawa, 1997, for an earlier overview focusing on family, gender,
and religion). In this article, we first discuss the properties of the standard rational
choice model, the so-called baseline model. Thereafter, we address extensions of
the model in terms of macro-level conditions and extensions that elaborate on the
micro-level assumptions related to individual behavior. We conclude with a short
overview of properties of recent empirical research testing rational choice models
and an outlook to possible future developments.

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Foundations of Security and Loss Pre-

vention
Philip P. Purpura, in Security and Loss Prevention (Seventh Edition), 2019

Rational Choice Theory

Rational choice theory, developed by Cornish and Clark (1986), is linked to deter-
rence theory in that individuals make rational decisions to avoid punishment and
criminal sanctions that deter them. Major elements of rational choice theory are
that individuals (1) study the consequences of crime against the benefits of crime
before committing a crime and (2) select criminal behavior when the rewards offset
the costs. Factors that may be considered by an individual contemplating a criminal
act are the possibility of being caught (aided by security), arrested, imprisoned, and
stigmatized. However, the potential rewards may appear more attractive, such as
monetary gain, respect from others, and the thrill of “getting away with a crime.”

This theory provides a foundation for security strategies that increase the risks and
consequences of crime. However, let us look at a more difficult security challenge
that may weaken rational choice theory in its applicability to security planning.
Suppose an individual is down-and-out and has no concern about being stigmatized
or separated (because of incarceration) from family and friends. The rewards of
committing a crime may be attractive and the act may be rationalized as, “I have
nothing to lose.” Certain offenders are indifferent about imprisonment because
they receive free care (e.g., food, shelter, etc.) and are with friends. In such cases,
alternative theories as described below will enhance security and increase the risk
for offenders.

Because of efforts to reduce the expensive problem of false alarms (see Chapter
2) through, for example, local government ordinances that specify nonresponse
by police to unverified alarm activations, do you think such efforts are reducing
apprehensions? Do you think because of “nonresponse,” alarm systems do not deter,
as rational choice theory would suggest?

> Read full chapter

Foundations of Security and Loss Pre-

vention
Philip P. Purpura, in Security and Loss Prevention (Sixth Edition), 2013

Rational Choice Theory

Rational choice theory, developed by Cornish and Clark (1986), is linked to deter-
rence theory in that individuals make rational decisions to avoid punishment and
are deterred by criminal sanctions. Major elements of rational choice theory are that
individuals (1) study the consequences of crime against the benefits of crime prior
to committing a crime and (2) select criminal behavior when the rewards offset the
costs. Factors that may be considered by an individual contemplating a criminal
act are the possibility of being caught, arrested, imprisoned, and stigmatized. For
an individual who is employed, a criminal act can also result in losing one’s job
and career. However, the potential rewards may appear more attractive, such as
monetary gain, respect from others, and the thrill of “getting away with a crime.”
This theory provides a foundation for security strategies that increase the risks and
consequences of crime. Examples are formidable security that will likely catch an
offender and a strong cooperative relationship with police and prosecutors.

Let us look at a more difficult security challenge that may weaken both rational
choice theory and its applicability to security planning. Suppose an individual is
unemployed, in poverty, desperate because of a variety of reasons, and has no
concern about being stigmatized or separated (because of incarceration) from family
and friends. The rewards of committing a criminal act may be attractive and the act
may be rationalized as, “I have nothing to lose.” In this case, alternative theories as
described next will enhance security.

Because of efforts to reduce the expensive problem of false alarms (see Chapter
2) through, for example, local government ordinances that specify nonresponse
by police to unverified alarm activations, do you think such efforts are reducing
apprehensions? In addition, do you think because of “nonresponse,” the use of
alarm systems does not deter, as rational choice theory would suggest?

> Read full chapter

Verstehen and Erklären, Philosophy of

J. Bransen, in International Encyclopedia of the Social & Behavioral Sciences, 2001

2.4 Deliberation
Rational choice theory (see Rational Choice Theory: Cultural Concerns) is the most
serious attempt to fully acknowledge the normativity that is crucial to intentional
explanation, and the subjective meanings that play their indispensable role in behav-
ioral and attitudinal rationality, without giving up the aim of a unified science based
on erklären. The hope of rational choice theory is to explain and predict human action
in terms of laws that causally relate expected utility numbers and ensuing actions.
The idea is that for an agent whose preferences conform to various constraints, it is
possible to represent him as having a utility function and a probability function such
that every action maximizes expected utility as computed by those functions (Eells
1982).
A strong reply is open to those favoring a verstehen approach. It starts from the
observation that a choice is not merely an event that occurs, but is always also a
decision made by an agent capable of deliberation. Consider a case where a couple
wanders down the street, looking for a place to eat, and deciding to opt for that
small Thai restaurant next to the popular pizzeria. It is quite likely that explanatory
sense can be made of this choice in terms of the calculation of utility numbers
and some additional game theoretic considerations about successful co-operation.
But such a story is of no use in trying to make sense of their conversation as a
matter of deliberation (Pettit 1991). If we want to make sense of the way in which
the woman replies to a suggestion made by the man, and vice versa, and of how this
conversation is their way of making up their minds about where to eat, then we need
something rational choice theory does not give us: interpretative understanding.
That is, rational choice theory could perhaps make explanatory sense of events that
we would ordinarily describe as choices, but making sense of them as choices, as
decisions reached by agents who reason their way to these choices, is something
that requires a verstehen approach. Making a choice or forming an intention is done
by deliberative agents, capable of recognizing and responding to considerations of
evidence (‘Look! They serve Teriyaki!’) and valuation (‘Oh, you know, you always hate
those crowded places.’).

Agents capable of deliberation should be in epistemic contact with the normative

import of the contents of their beliefs and desires. Deliberation requires an intelli-
gibility related to the first-person perspective of a rule-follower. Deliberative agents
must be able to exercise their care for the rationality of their beliefs—given what
they have reason to believe to be true—as well as their care for the rationality of
their desires—given what they have reason to value—and they must be able to
decide what to do on the basis of the beliefs and desires they come to accept as
rational. Deliberation is not something that looks like explaining and predicting
what to do given the expected utility numbers one assigns to possible outcomes.
In deliberation, one does not predict one's own actions. Of course, deliberation
might involve the weighting of utility numbers, but if it does, it does not do so
from the explaining and predictive standpoint of rational choice theory, but from the
first-person standpoint of appreciating the normative import of these numbers as
reasons on the basis of which one will choose to do what one does. This is so, even in
those cases where habits seem to rule (‘Yes, we always end up in this restaurant—but
of course, we cannot discuss such predictions as predictions.’).

If we are to think of choices and actions as events brought about by deliberating

agents who care to be rational (i.e., who try to determine and follow the appropriate
rules) and who ascribe meaning to what they do, we cannot do without verstehen.
Although this does not rule out rational choice theory altogether, it does rule out
the possibility of a completed social science based on merely an erklären approach.
> Read full chapter

Rational Choice Theory: Cultural Con-

cerns
J. Elster, in International Encyclopedia of the Social & Behavioral Sciences, 2001

2.4 Some Common Misunderstandings

Rational choice theory is often criticized, sometimes with good arguments, and
sometimes with bad. Although some of the bad arguments may apply to bad
versions of the theory, critics ought to address the best versions. The most common
misunderstanding is that the theory assumes agents to have selfish motivations.
Rationality is consistent with selfishness, but also with altruism, as when someone
is trying to select the charity where a donation can do the most good.

Rational choice theory is also sometimes confused with the principle of method-
ological individualism. True, the theory presupposes that principle. Talk about beliefs
and desires of supra-individual entities, such as a class or a nation, is in general
meaningless. The converse does not hold, however. Some of the alternatives to
rational choice theory also presuppose methodological individualism.

Furthermore, it is sometimes asserted that the theory is atomistic and that it ignores
social interactions. Almost the exact opposite is true. Game theory is superbly
equipped to handle three important interdependencies: (a) the welfare of each
depends on the decisions of all; (b) the welfare of each depends on the welfare of all;
and (c) the decision of each depends on the decisions of all. It is also sometimes
asserted that the theory assumes human beings to be like powerful computers,
which can instantly work out the most complex ramifications of all conceivable
options. In principle, rational choice theory can incorporate cognitive constraints on
a par with physical or financial constraints. In practice, the critics often have a valid
point.

Finally, it is sometimes asserted that the theory is culturally biased, reflecting (and
perhaps describing) modern, Western societies or their subcultures. However, the
minimal model set out above is transhistorically and transculturally valid. This
statement does not imply that people always and everywhere act rationally, nor
that they have the same desires and beliefs. It means that the normative ideal of
rationality embodied in the model is one that is explicitly or implicitly shared by all
human beings. People are instrumentally rational because they adopt the principle
of least effort. ‘Do not cross the river to fetch water,’ says a Norwegian proverb. Also,
as people know that acting on false beliefs undermines the pursuit of their ends,
they want to use cognitive procedures that reduce the risk of getting it wrong when
getting it right matters. That they often fail to adopt the right procedures does not
undermine the normative ideal.

> Read full chapter

Rational Choice and Organization The-

ory
Mary A. Zey, in International Encyclopedia of the Social & Behavioral Sciences
(Second Edition), 2015

Abstract
Rational choice theory (RCT) is based on the premise of individual self-interested
utility maximization. Organizational theory (OT) is based on the premise of efficient
functioning of organizations through means/ends rationality within organizations.
Organizational economic theory, which consists of transaction cost economics (TCE)
and agency theory (AT), forms an indirect link between RCT and OT. However,
TCE and AT differ in their grounding premises. Thus, economic organizational
frameworks, which purport to link micro-level RCT to meso-organizational theory,
are unable to do so, due to the incompatibility of the premises on which RCT and
OT rest. As one set of premises are assumed, the other becomes problematic. No
OT has successfully integrated RCT and OT.

> Read full chapter

Environmental Criminology and

Crime Control
Glen Kitteringham M.Sc., CPP, F.SyI, in Handbook of Loss Prevention and Crime
Prevention (Fifth Edition), 2012

Rational Choice Theory3

Rational Choice Theory was first fully presented by Ronald V. Clarke and Derek B.
Cornish in 1986 in The Reasoning Criminal: Rational Choice Perspectives on Offending.
As Tayler stated, the rationale behind the theory is that people will commit a crime
if it is in their own best interests.1 Basically the offender uses a decision-making
process in which the positive and negative aspects of committing a particular act is
weighed. If the perception is that there are more reasons for proceeding, regardless
of the existing security barriers, then at the very least an attempt will be made. If
an opportunity presents itself and there is a benefit with little likelihood of being
apprehended, then the offender will commit the crime. Further, Pease quotes Clarke
and Cornish, who claim that “the underlying assumption is that offenders seek to
benefit themselves by their criminal behavior. This entails making decisions and
choices, however rudimentary their rationality might be, being constrained by limits
of time, ability, and the availability of relevant information.”2

Following this rationalization, it is up to the security practitioner to convince the po-

tential offender that it is not in the offender’s best interests to carry out the act. This
is carried out by target hardening. The application of situational crime prevention
techniques are the results of this theory. As rational choice is the theoretical element,
what follows are situational crime prevention techniques — practical efforts used to
reduce criminal opportunities. These techniques involve:

1. Increasing the effort needed to commit a crime

2. Increasing the risk of perpetrating the crime

3. Reducing rewards of the crime

4. Reducing provocations

5. Removing excuses enabling crime opportunity

These five techniques are further subdivided into five subcategories to help eliminate
opportunities for criminals. They can range from physical access control devices to
the use of psychology to deter people’s criminal tendencies. Finally, one should
be reminded that criminal decision making is crime specific, which means that
“specific offenses bring particular benefits to offenders and are committed with
specific motives in mind” (Cornish and Clarke, 2003, 26). The actions, risks, and
rewards weighed will be different for the laptop thief, the arsonist, the vandal, or
industrial spy. In addition to these issues, even within the narrow confines of a single
crime such as laptop theft, what motivates one offender (which may be financial
desire) will be different from the drug addict who steals a laptop to trade to their
drug dealer for crack cocaine for their next high.

To sum up the principles of rational choice theory there are a number of observations
to be made. Criminals are opportunistic, average every day people. If the reward
is high enough, deterrents will not work. People will weigh the pros and cons of
committing the crime and the final decision is centered on the specifics of the target.
Finally, situational crime prevention works best with the amateur and least with the
professional. Bearing in mind that there are different classifications of criminals,
primarily amateur and professional, the more the security precautions taken, the
more likely all but the most determined attacker will be stopped. Other factors
come into play as well. Two that will be discussed are displacement and diffusion
of benefits.

These techniques are presented in the following table.

> Read full chapter

Rational Choice Explanation: Philo-

sophical Aspects
R. Hardin, in International Encyclopedia of the Social & Behavioral Sciences, 2001

7 Concluding Remarks
Rational choice theory is a diverse set of approaches to the study of society that are
based in assumptions of individual rationality. Indeterminacies in such theory often
mirror indeterminacies in social relations and individual understandings of these.
Indeed, many rational choice explanations have demonstrated the indeterminacy of
social choice. Among the most important contributions of such theorizing is the
descriptive clarity it often adds to our understanding of issues that have been poorly
characterized before. Rational choice explanation is inherently about states of affairs,
although it can include in a state of affairs concerns for anything that motivates
people. It is therefore easy to see how it fits with utilitarianism.

Rational choice value theories, when introduced into the study of law, have led to
the burgeoning movement of law and economics, which has produced the most
systematic analysis of the broad sweep of law and legal rules that legal scholarship
and practice have hitherto seen. The quick march of that movement—roughly
beginning with the Coase theorem (Coase 1988)—through virtually all areas of law
has provoked counterattacks, but none of these is itself grounded in a value theory
systematic enough to permit more than piecemeal objections. The Coase theorem
says, with audacious generality and simplicity, that if there are no transaction costs to
impede economic cooperation between owners of various resources, then ownership
will not affect production, although it presumably will affect how the profits from the
production are divided. That theorem, along with earlier work of Ronald Coase and
many others, has led to the massive study of transaction costs.

We have a rich understanding of the problems of rational choice value theories just
because those theories have been a major focus in the development and articulation
of the entire discipline of economics. The theories are a product of centuries of de-
termined and often brilliant debate with dozens of major contributions. Alternative
value theories have had far too few advocates and critics to yield much understanding
at all. Indeed, value claims commonly seem to be ad hoc and not systematically
generalizable. Such considerations are no argument for the superiority or rightness
of any value theory. But they may be a tonic for those who wonder how the only
well-articulated class of value theories is so easy to criticize: It has enough content
to be subject to extensive and varied criticism.

> Read full chapter

Rational Choice Explanation: Philo-

sophical Aspects
Russell Hardin, in International Encyclopedia of the Social & Behavioral Sciences
(Second Edition), 2015

Concluding Remarks
Rational choice theory is a diverse set of approaches to the study of society that are
based in assumptions of individual rationality. Indeterminacies in such theory often
mirror indeterminacies in social relations and individual understandings of these.
Indeed, many rational choice explanations have demonstrated the indeterminacy of
social choice (Hardin, 2003). Among the most important contributions of such theo-
rizing is the descriptive clarity it often adds to our understanding of issues that have
been poorly characterized before. Rational choice explanation is inherently about
states of affairs, although it can include in a state of affairs concerns for anything
that motivates people. It is therefore easy to see how it fits with utilitarianism.

Rational choice value theories, when introduced into the study of law, have led to
the burgeoning movement of law and economics, which has produced the most
systematic analysis of the broad sweep of law and legal rules that legal scholarship
and practice have hitherto seen. The quick march of that movement – roughly
beginning with the Coase theorem (Coase, 1988) – through virtually all areas of law
has provoked counterattacks, but none of these is itself grounded in a value theory
systematic enough to permit more than piecemeal objections. The Coase theorem
says, with audacious generality and simplicity, that if there are no transaction costs to
impede economic cooperation between owners of various resources, then ownership
will not affect production, although it presumably will affect how the profits from the
production are divided. That theorem, along with the earlier work of Ronald Coase
and many others, has led to the massive study of transaction costs.
 We have a rich understanding of the problems of rational choice value theories just
because those theories have been a major focus in the development and articulation
of the entire discipline of economics. The theories are a product of centuries of de-
termined and often brilliant debate with dozens of major contributions. Alternative
value theories have had far too few advocates and critics to yield much understanding
at all. Indeed, value claims commonly seem to be ad hoc and not systematically
generalizable. Such considerations are no argument for the superiority or rightness
of any value theory. But they may be a tonic for those who wonder how the only
well-articulated class of value theories is so easy to criticize: It has enough content
to be subject to extensive and varied criticism.

> Read full chapter

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