therationalchoicetheory-180901233921.pptx

1. The Rational Choice
Theory

2. Jens
Martensson
What is The Rational
Choice Theory?
Rational choice theory is the view that people
behave as they do because they believe that
performing their chosen actions has more
benefits than costs. That is, people make
rational choices based on their goals, and
those choices govern their behavior. Some
sociologists use rational choice theory to
explain social change. According to them,
social change occurs because individuals
have made rational choices. For example,
suppose many people begin to conserve
more energy, lowering thermostats and
driving less. An explanation for this social
change is that individual people have
decided that conserving energy will help
them achieve their goals (for example, save
money and live more healthfully) and cause
little inconvenience. Critics argue people do

3. Martensson
Cesare
Beccaria
Historical Context of Rational
Choice Theory
Rational choice theory and its assumptions
about human behavior have been integrated
into numerous criminological theories and
criminal justice interventions. Rational
choice theory originated during the late 18th
century with the work of Cesare Beccaria.
Since then, the theory has been expanded
upon and extended to include other
perspectives, such as deterrence,
situational crime prevention, and routine
activity theory. The rational choice
perspective has been applied to a wide
range of crimes, including robbery, drug use,
vandalism, and white-collar crime. In
addition, neuropsychological literature
shows that there are neurobiological
mechanisms involved in our “ratioJenenas
l

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BACKGROUND OF THE
RATIONAL CHOICE
THEORY

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There are many different influences on RCT – utilitarian economics, Weber, Pareto,
and recent North American and European theorists.
A. Weber. As soon as rationality is mentioned in sociology, Weber’s
approach comes to mind. For Weber, rationality was a driving social
force in society, especially in modern society. Weber used the concept
of rationality in several different senses but in all of these “its principal
meaning … centers on the calculability, intellectualization, and
impersonal logic of goal-directed action. The instrumental approach to
action takes values as given and focusses instead on the efficient
choice of means to reach such goals” (Holton, 1996, p. 43). In such
action, a primary focus is on conscious action by the individual social
actor, considering others and attempting to achieve his or her own goals
in a considered and systematic manner. Weber regarded this as
characteristic of modern society, and tended to regard rationality as an
overpowering social force that increasingly affects all aspects of society.

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RCT can be regarded as one way of working out an explanation of the
social world in a Weberian manner. Weber argued that sociologists
should develop an interpretive understanding of social action in order to
explain “its course and effects” (Abel, p. 223). For Weber, action is
social in that it takes account of the “behavior of others and is thereby
oriented in its course” (Abell, p. 223). While most sociologists working
in the Weberian tradition adopt a more complex view of meaning and
interpretation and how social actors interact, RCT provides one possible
way of explaining the orientation and conscious consideration of the
actor in taking any social action. RCT provides an interpretation for
individual action, it shows what the effects of this are, and it certainly is
focussed on goals and orientation – so it satisfies Weber’s conditions for
social explanation. It can lead to an interpretive understanding of
social action, a causal explanation of its course and effects, can be
expanded to include social interaction and interdependence among
social actors (Abell, p. 230).

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B. Utilitarian Economics. Much economic theory developed in the nineteenth
and twentieth century foreshadows RCT. In fact, it may be that sociologists,
impressed with the overall power and rigour of such economic models,
developed RCT as a sociological counterpart to utilitarian economic models.
In general, such models are based on the assumption that economic actors
are “rational and as seeking to maximize their utilities or benefits” (Turner,
1998, p. 303). These economic models usually begin with an individual who
has a set of preferences (for particular goods and services, for income, for
leisure) but who does not have unlimited resources and faces constraints in
the form of limited land (agriculture), time, income, and a set of prices that
they cannot individually influence. Presented with various options concerning
how to meet or satisfy his or her needs or desires, the individual economic
actor must make decisions about how to best achieve his or her preferences,
given the set of constraints faced and choices available. Models explaining
how individuals decide to purchase certain commodities or supply labour
using this approach have proven to be powerful economic models – they can
help explain effects of taxes, changes in consumer purchasing patterns,
labour force activity, and business operations.

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C. Pareto. Vilfredo Pareto (1848-1923) was of Italian-French ancestry who became a
professor of economics in Switzerland in 1893, later returning to Italy. Pareto had many
concerns but he is known for distinguishing the maximum utility of the community as a
whole from the maximum utility of members of the community (as an aggregate of
individuals). Actions which might be regarded as positive for the nation, such as winning
a war, pursuing nationalist or other public policies, might be associated with sacrifice or
harm to some individuals. Pareto was concerned to preserve individual
utilities and argued that analysts should not compare the utility of such an action for
different individuals, since individual utilities are noncomparable. As a result, he argued
that public policy should be directed toward an optimum that is now referred to as a
Pareto optimum – an optimum whereby no one can gain greater benefits without others
losing some benefits. For example, in a social situation it may be possible to make both
persons better off through free exchange – presumably the exchange improves the
situation of each, otherwise why would they have entered into the exchange. In other
situations, it may be possible to improve the situation of one party without hurting the
other. A Pareto optimum is reached when there are no further possible improvements to
the situation of one without harming the other party. While this may seem a reasonable
approach, one problem is that there may be several Pareto optima, where each is
noncomparable with the other in terms of overall societal benefit. However, Pareto’s
method is sometimes worthwhile and shows that a methodologically individualist
approach can address certain issues of social action. (Waters, pp. 61-3).

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D. Recent Contributors. The names most associated with RCT are George
Homans and Peter Blau, who examine social exchange and the benefits and
costs of alternative courses of action (Adams and Sydie, pp. 197-200). Their
concerns parallel economic issues, but focus on social rather than economic
exchange, with social behaviour as an exchange of activity (Ritzer, p. 405).
Some examples from the sociologist James Coleman, another proponent of
RCT, are provided later.

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Basic Principles of Rational Choice Theory
► Individuals are rational.
–They can think in a logical way
► Individuals have interests.
–Different people have different interests.
–The interests of a person define her utilities.
► Individuals make choices.
–The choices people make influence their utilities.
► Individuals make choices in a rational way to increase their utilities.
–A person does not have full control over the results of her choices

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ASSUMPTIONS OF THE RATIONAL CHOICE
THEORY
Adams and Sydie (p. 190) explain Coleman’s RCT as aimed at
explaining individual action that has a purpose, or purposive action, and
the reasons for the action. That is, individuals as social actors engage
in social action for some purpose, actors are rational (they use reason
in a conscious manner), and actors are responsible individuals
(accountable for their actions). In the quote, Coleman argues that the
aim of social science is to “conceive of that action in a way that makes
it rational from the point of view of the actor.” (Adams and Sydie, p.
190).
The manner in which RCT proceeds is to examine social action using
the following concepts and guidelines.

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►
►
►
Resources available to the actor. These can be either tangible (money, ability to
work, capital, land) or intangible (personality, skills, abilities, attractiveness). These
include resources that affect others, personal attributes, and resources that can be
exchanged with others (Adams and Sydie. 191).
Interests, preferences, needs. Each social actor has a set of needs, interests, and
preferences. While these can change, they tend to be relatively stable over time.
Courses of social action. Each social actor has some options concerning possible
courses of action. For some individuals, and in some situations, choices may be
limited (in their daily lives, members of the proletariat have little choice but to work
at a job) while for others there are multiple options (capitalist has many options).
Each option has an expected set of outcomes associated with it that involve:
Benefits associated with different courses of social action. These may be tangible
(money, goods and services) or intangible (psychic satisfaction,
Costs of different course of action. These may be costs associated with the outcome
(eg. a woman in a family with the husband as primary income source who seeks
divorce may expect that reduced income will result) or costs associated with the action
itself (the process of divorce may be a stressful and miserable set of experiences).

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► Optimality of decision. The social actor’s decision is an optimal one in sense of
maximizing difference between benefits and costs (not just monetary, but
satisfaction, psychic, social benefits and costs). (Coleman and Farraro, p. xi). At
least the actor’s decision is based on maximizing the expected net gain from the
decision (net gain of action = benefits of action minus costs associated with the
action). That is, in taking the course of action selected by the actor, he or she
expects that his or her interests and preferences will be met to the best extent
possible.Of course, the result may not always turn out to be optimal, given
uncertainty about the future, unexpected outcome, or unintended consequences
of the social action.

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ASSUMPTIONS OF THE RATIONAL CHOICE
THEORY
1.Individualism – it is individuals who ultimately take actions.
Individuals, as actors in the society and everywhere, behave and act
always as rational beings, selfcalculating, self-interested and self-
maximizing, these individual social actions are the ultimate source of
larger social outcomes. From this first overarching assumption derives
the four other major assumptions summarized below. 2.
2.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. This
does not mean that the course of action that the actor adopts is the
best in terms of some objective, and outside judgment. The rational
choice theory, therefore assumes, according to Abell (2000), that

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3. Structures -Abell argues that structures and norms that dictate a
single course of action are merely special cases of rational choice
theory. In other words, the range of choices in other circumstances
differs from choices in a strong structural circumstance, where there
may be only one choice. 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. Again,
structures, as we know them, may not be optimal from the viewpoint of
an individual with few resources, however, the rational choice approach
will attempt to explain is how this situation emerges and is maintained
through rational choices.

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4.Self-Regarding Interest – This assumption states that the actions of
the individual are concerned entirely with his or her own welfare. Abell
(2000) noted that in as much as this is a key assumption in the rational
choice approach, is not as essential to the approach as the assumption
on optimality. He also noted that various types of group sentiments
could exist, such as cooperation, unselfishness, charity, which initially
may seem to be contrary to individual optimality. Rational choice
theorist may argue that these sentiments can be incorporated into the
rational choice model by observing that such sentiments may ultimately
be aimed at pursuing some form of self-interest. For instance, charity
movements or efforts Abell says, could ultimately be aimed at making
an individual feel good or could be a means of raising one’s social
esteem in the eyes of others.
5.Rationality – This appears the most predominant assumption of the
rational choice theory. All individuals, according to this assumption 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

17. STRENGTHS OF THE RATIONAL CHOICE
THEORY
The rational choice theory has largely emerged in the political
science subfield. It has been commended as the prototype for
a more deductive approach to political analysis. Becker (1976)
has described the rational choice model as “a unified
framework for understanding all human behaviour”, Rogowski
(1997) also asserts to the model as the “most rigorous and
the most general theory of social action that has been
advanced in this century”. Hirshleifer (1985) simply describes
the theory as “universal grammar of social science”. Other
advantages of the rational choice theory can be summarized
as;
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1.
2.
3.
Generality; This means that one set of assumptions relating to
each type of actor in a given circumstance, is compatible with
any set of structural assumptions about the environmental
setting in which the actor is present.
Parsimony; The common knowledge of rationality assumption,
the assumption of isomorphic and self-regarding utility function,
when combined with the rational optimization model, allow
rational choice theories to treat variations in choices among
actors and by an actor over time as entirely a function of their
structural position. Preferences and beliefs are simply
perceived as the only relevant variables for determining action.
Predictive; Assumptions of the rational choice model have been
used to produce a wide variety of decisive theories, whose
predictions about the measurable real world phenomena rule
out a much larger set of outcomes than what is already

19. Weaknesses of Rational Choice Theory
►
In addition to the difficulties associated with accepting the three basic
assumptions, there are a number of other problems associated with RCT.
Some of these are:
► Problems associated with inadequate information and uncertainty. This
may make it difficult for individuals to make rational decisions. As a result,
they may rely on other ways of making decisions.
Human social action and interaction are complex, and many of the
theories examined earlier may provide better guides to how these take
place.
► Theorists of rational choice argue that macro level structures and
institutions can be explained from the models of individual social action.
But there are problems of aggregation of individual to societal level
phenomena. These same difficulties exist in well developed
models.
economic
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► Norms and habits may guide much action, and once these take root
people may not question them but use them to pursue meaningful social
action.
► One problem of RCT is that some theorists argue that almost everything
humans do is rational, even altruism and self-sacrifice. By expanding to
include all forms of action as rational, action that is nonrational or
irrational becomes part of the model. By including every possible form of
action in rational choice, it is not clear how the standards of what is
rational and what is not are constructed.
► RCT may be concerned only with instrumental rationality and not other
forms of rationality such as substantive rationality, communicative
rationality, etc.

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References
:
https://youtu.be/7NZ1820hrxg
http://uregina.ca/~gingrich/319m703.htm
THANK
YOU!