Rational Choice Theory &

Institutionalism
CHOOSE YOUR FIGHTER

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Jollibee OR McDo?

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MANUYO OR MAGALIT

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OR

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 TAKE
DINE IN OR OUT

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OR

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BEBE
TIME OR ARAL

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Rational Choice Theory
 Rational Choice Theory
 This theory states that individuals use their self-interests to make choices
that will provide them with the greatest benefit. People weigh their options
and make the choice they think will serve them best. 
 According to the definition of rational choice theory, every choice that is
made is completed by first considering the costs, risks and benefits of
making that decision. Choices that seem irrational to one person may
make perfect sense to another based on the individual's desires.

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Assumptions of Rational
Choice Theory
 All actions are rational and are made due to considering costs and rewards.
 The reward of a relationship or action must outweigh the cost for the
action to be completed.
 When the value of the reward diminishes below the value of the costs
incurred, the person will stop the action or end the relationship.
 Individuals will use the resources at their disposal to optimize their
rewards.

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Application of
Rational Choice Theory
◉ Economics: Rational choice theory can explain individual purchasing
behaviors.

◉ Politics: Rational choice theory can be used to explain voting behaviors,

the actions of politicians and how political issues are handled.

◉ Sociology: Rational choice theory can explain social phenomena. This is

because all social change and institutions occur because of individual
actions.

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Institutionalism
Institutionalism
 It is an approach that emphasizes the role of institutions.

 A dominant approach in the scientific study of the society which views

society as made up of individuals who are influenced by institutions, which
are also humanly created constraints that shapes or structures political,
economic, and social interactions.

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Institutions
 Institutions are stable, value recurring patterns of behavior.

 As structures or mechanisms of social order they govern the behavior of a

set of individuals within a given community.

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Five Basic Institutions
 Family
 Education
 Religion
 Economics
 Politics

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Kinds of Institutions
◉ Formal Institution. it includes the written constitution, laws, policies,
rights, and regulations enforced by official authorities.

◉ Informal Institution.  are socially shared rules, usually unwritten, that

are created, communicated, and enforced outside of officially sanctioned
channels.

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Application of Institutionalism

 Without the institutions a society cannot achieve fulfilment in terms of

economy, or relationships.

 When there are no rules and regulations in a society, people are more
likely to indulge in crime and other harmful activities.

 They contribute in organizing a society and its people.

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Thanks!
Any questions ?

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