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• Rational choice theory

  The view that people behave as they do because they believe that performing their chosen actions has more benefits than costs
• GARY BECKER popularized rational choice theory, a 1992 Nobel Memorial Prize Laureate in Economics Science
• Elster (1989): 'When faced with several courses of action, people usually do what they believe is likely to have the best overall outcome'
• 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
• Rational choice theory


  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
• How individuals decide what will serve them best is dependent on personal preferences
• Rational choice theory example


  • One individual may decide that abstaining from smoking is best for them because they want to protect their health
  • Another individual will decide they want to smoke because it relieves their stress
• Rational choice theory states that there is always a rational justification for behaviors
• Individuals try to maximize their rewards because they're worth the cost
• Assumptions of the rational choice theory

  • Individualism
  • Optimality
  • Structures
  • Rationality
• Individualism

  It is individuals who ultimately take actions, individuals as actors in the society and everywhere, behave and act always as rational beings, self-calculating, self-interested and self-maximizing, the individual's social actions are the ultimate source of larger social outcomes
• Optimality

  Individual choose their actions optimally, given their individual preferences as well as the opportunities or constraints with which the individual faced
• Abell (2000) defines optimality as taking place when no other course of social action would be preferred by the individual over the course of action the individual has chosen
• Optimality

  The rational choice theory assumes that individuals "do the best they can, given their circumstances as they see them"
• Structures

  Abell argues that structures and norms that dictate a single course of action are merely special cases of rational choice theory, although these structures may be damaging to the rational choice model, individuals will often find a way to exercise action optimally, hence the rational choice model may not necessarily show harmony, consensus, or equality in courses of action
• Rationality

  The most predominant assumption of the rational choice theory, all individuals act in ways that would benefit them more; every individual is most like to undertake courses of actions that they perceive to be the best possible option and one that would immensely be to their own advantage
• Assumptions of the 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
• Rational choice theory expresses that individuals are in control of their decisions, they don't make choices because of unconscious drives, tradition or environmental influences, they use rational considerations to weigh consequences and potential benefits
• Rational choice theory also helps to explain seemingly "irrational" behavior, because rational choice theory states that all behavior is rational, any type of action can be examined for underlying rational motivations, rational choice theory can promote inquiry and understanding, helping differing parties, like a client and a therapist, to recognize the other's rationale
• A limitation of rational choice theory is that it focuses on individual action, while one could say that individual action drives large social structures, some rational choice theory critics argue the theory is too limited in its explanation
• Another weakness of rational choice theory is that it doesn't account for intuitive reasoning or instinct, for decisions that must be made in an instant, such as decisions that influence survival, there may not be time to weigh the costs and benefits
• Applications of rational choice theory

  • Economics and business: 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
  • Addiction treatment: Rational choice theory can be used to identify addiction motivations and provide substance alternatives that are equally beneficial to patients
• Rational choice theory is grounded in the discipline of Economics
• Every action and behavior is rooted in our choices or decision-making
• Rational choice theory responds to the concept of Cost-Benefit Analysis
• Cost-Benefit

  • Possible gains or losses from patronizing a product or service
  • Money, Decision, Sacrifice, Quality
• Plato's book The Republic highlighted the importance of Human Rights and Freedoms in society
• The lack of justice becomes a reason for people to abuse their fellow humans and deplete limited resources
• Thomas Hobbes emphasized the importance of government, particularly absolute monarchy, in achieving the common good through the enforcement of laws to protect people's rights
• Criticisms of rational choice theory

  • Loses sight of moral and ethical standards, only focuses on personal interests like wealth and power
  • Overemphasizes the need for an equivalent or payoff for every decision