Rational Choice Theory Essay

Pages: 4 (1509 words)  ·  Bibliography Sources: 4  ·  File: .docx  ·  Level: Master's  ·  Topic: Sociology

Rational choice theory is a paradigm for understanding and modeling social and economic behavior within groups or systems. It is sometimes referred to as rational action theory, often interpreted as ways to assume behaviors in microeconomic models as "wanting more" of something rather than less -- goods, services, overt political control, etc. (Allingham, 2002) It became even more popular as a usable theory within political science, sociology and philosophy after Gary Becker used it in describing studies of crime, discrimination and human capital and subsequently won the 1992 Nobel Memorial Prize in Economics (Nobel Prize, 1992).

Rational Choice Theory (RCT) uses the term rational in a rather non-traditional manner -- not as thoughtful or clear, but as a way to describe the way an individual acts as if they are balancing costs against benefits to find the most efficacious solution to a problem -- really more as if something ends up being a more personal advantage. Using this theory, any decision made -- logical, illogical, sane or insane is said to mimic a "rational" benefit process. In effect, it is then a way of choices in patterns, rather than individual or unique choices. For example, there is nothing irrational about preferring dogs to cats as pets the first time, but there is something quite irrational about preferring dogs to cats and cats to dogs on a regular or even ad hoc, basis (Goode, 1997).

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Further, RCT is less interesting in the origins, nature or even validity of human motivations, but takes the quantitative approach to find the roots of behavior and preferences and the reasons choices are made. It lacks any understanding of consumer motivations (for many) causing some economists to prefer using it as a way of understanding the organizations behavior where goals are clear and delineated. In other words, competition in the market encourages organizations to maximize profits so they can survive within the market. Unlike a more utilitarian approach to "maximizing utility," RTC works because it is more focused and secure in nature (Alchain, 1950).

Essay on Rational Choice Theory Is a Assignment

Because RCT is so multidimensional in its modelling capabilities, though, all RTC models assume that individuals will choose the best action according to a stable preference of the pros and cons facing their choice. The model is not completely descriptive of reality, but instead helps understand reasoning and help in formulating falsifiable hypothesis, and judge those hypotheses using empirical tests. One famous example of this comes from Milton Friedman, who noted, if a theory that says the behavior of the leaves of a tree is explained by the rationality of the leaves and proven empirically, then under RCT it is a successful hypothesis (Friedman, 1970).

One might then ask what happens if it is impossible to empirically test or falsify the assumption of rationality? Does this mean the theory is true by definition, but not by example? Proponents of RCT say notk, that empirical tests may be conducted on some of the results in most cases. However, in order to glean a more accurate view of human decision-making, RCT must be expanded using other disciplines (psychology and anthropology, for instance) to expand the theories of markets by looking a micro (individual) behavior as morphing into maco (group) behavior (Kahneman, 2002).

More recently, RCT has impacted our understanding of interest groups, elections, governmental behavior, coalition groups, and even the nature of bureaucracy. In this, political science, sociology and other social sciences often use methodological individualism when dealing with RCT. This is an assumption that social situations (group or collective behaviors) are the result of individual actions that may coalesce, but nevertheless begin individually. Sociologsts tend to emphasize individual behavior by social institutions -- a top down approach, which is often contrary to RCT. In any case, the basic idea of RCT is that all the pattenrs of behavior within society reflect choices made by individuals who want to maximize their selfishness (maximize return, minimize costs). Individuals then make appropriate-level decisions by comparing the costs and benefits to non-action or a different action. This then results in behaviors that move from the individual to society and therefore become reflective of culture (Lichbach, 2003).

Bounded rationality is the idea that in decisions, the rationality of individuals is completely limited by the information they have (in other words, their cognition of facts), and the time they have to make decisions. It seems a compliment to RCT, since when decision makers lack the ability to arrive at a cogent and on-time solution, they apply their "choice or selfishness" only by eliminating other choices. This assumes, however, that decision-makers regularly lack the ability and resources to make the optimal decision, and so must then depend on simplified choices that are available. Thus, the role of the individual decision-maker is to find a satisfactory decision as opposed to the optimal decision. One scholar explained this using scissors: one blade is the limitations to knowing (cognition), the other the environment (external stimuli). The optimal combination of the two form a better decision in which resources may be exploited by using pre-existing structure and expected regularity within the environment in question (Gigerenzer, G., et al., 2002).

Dual process theory allows us to understand how a set phenomenon can occur in two different ways, or because of two divergent processes. Sometimes the processes consist of an automatic process combined with a controlled process. From psychology, we know that multi-process theories exist because the human brain is capable of decision-making on several fronts, all interacting and then forming a new interpretation or set of choices. One might think of this as an older system (System 1 or the limbic/reptilian brain) and a newer adaptive human system (System 2 or the more cognitive and logical mode of finding choice). System 1 is innate and System 2 must be learned and responsive to the environment. However, when one realizes that these systems are interacting continually to form decision-making logic, then we might find also differing sets of reality associated with each. Decisions, then, are not always the result of selfishness or need, but of something more primal (Evans, J., et al., 2009).

If we use these three interpretations when looking at political behavior, we can certainly find interpretations on how individuals make political decisions as well. Casting a vote may seem like an easy decision, but upon analysis, it is clearly not. RCT would have us think of the decision as one that benefits the individual above all else, bounded rationality would find that we pick the candidate based on the lack of a wider choice and almost settling for the path of least resistance, and dual process theory would find that our decision is based on both a rational and objective look at the candidates and their platforms, record and values- yet still allowing our primal "feelings" and emotions to make the final choice. In this, one might ask how much self-interest comes into the model. (Sears & Funk, 1990)Since this theory takes into consideration the thousands of unique variables present within a person running for office (body language, trust, media, message, and so much more), then it is neither a predictor nor an explanation of behavior, but a way to organize voter choice (Chong, 2009).

To actually interpret political behavior, though, RCT does provide a framework to examine selfish motivations within decisions. Why, for example, would someone vote for a candidate that would do them the most harm (economically, socially, etc.)? Instead, RCT is possibly the best way we can model the electorate since RCT assumes humans make decisions in a rational manner. This allows for a modeling approach that may help answer questions like voting behavior, campaign efficacy, bloc voting, and even why certain political votes are decided in a seemingly unpredictable manner. True, theories are only as good as the information… [END OF PREVIEW] . . . READ MORE

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