DISS- RATIONAL CHOICE THEORY .powerpoint

1. Choosing a Job Offer
Scenario: You have two job offers:
•Job A offers a high salary (P450,000/year), but requires
you to relocate to a city with a higher cost of living and a
45-minute commute each way.
•Job B offers a moderate salary (P330,000/year) but is
located in your current city with no commute and lower
living expenses.

GUIDE QUESTIONS:
• How did you find this activity?
• What benefits did you get in deciding your
choice?
• What will you have to sacrifice in making
decision?
• How do you prioritize your decision?
• What is your guide in making decision?

2. Deciding to Study or Go Out with Friends
Scenario: You have an exam tomorrow, but your friends
invited you to a party.
Study Option: You study for 3 hours, which increases your
chance of doing well on the exam.
Go to Party Option: You go to the party, spending 3 hours
socializing, which is fun but may result in lower exam
performance due to less preparation.

3. Choosing Between Public Transportation
and Driving
Scenario: You need to get to work, and you have two
options:
Option 1: Take public transportation, which is cheaper but
takes 45 minutes each way.
Option 2: Drive your own car, which costs more in gas and
parking (500/day) but takes only 20 minutes.

4. Deciding to Buy a Smartphone
Scenario: You're thinking about purchasing a new
smartphone.
Option 1: Buy the latest iPhone for P107,990. It has all the
latest features, a great camera, and good brand reputation.
Option 2: Buy a mid-range Android phone for P15,499. It
has decent features and a good camera but lacks some of the
latest tech advancements.

5. Deciding Whether to Buy a House or Rent
Scenario: You’ve been considering whether to buy a house
or continue renting.
Option 1: Buy a house for P2.5M with a 30-year mortgage.
You will build equity, but you will also be responsible for
maintenance and property taxes.
Option 2: Continue renting an apartment for
P10,500/month. You avoid maintenance costs, but you don’t
build equity.

6. Deciding to Exercise or Stay Home
Scenario: You have an hour of free time, and you can either
exercise or relax at home.
Option 1: Go to the gym for a workout. The benefit is
improved health, fitness, and stress relief, but it requires
energy and time.
Option 2: Stay at home, watch TV, and relax. The benefit is
immediate comfort and relaxation, but you won’t get any
health benefits.

3.
WHAT IS RATIONAL CHOICE
THEORY

• It can be trace back to the Behavioral
Revolution in the American political
science (1950’s- 1960’s)
• Positivist
• The source of knowledge is experience.
(e.g. survival)
• RCT- has become dominant approach in
political science (U.S).

RATIONAL CHOICE
Human action and behavior are product choice or
decision
Individual rationalize their situations by processing
between the most beneficial choice and the lesser
individual cost.
Cost benefit analysis is always performed in every
given situation and is considered an instinctual
response of every human.

Cost is something disadvantageous to or what is lost by an
individual, while benefit is that which is gained by
advantageous to the individual after making a choice.
• Will this benefit me?
• How will this benefit me?
• What will benefit me most?
• How far am I willing to negotiate?
• What will I have to sacrifice?
• How much will it cost me?
Some of the questions commonly asked during a cost-
beneficial analysis are the following:

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.

The people behind the RCT believes that is a
powerful tool in making sense why do people
act or behave on the way they do.

THREE PILLARS
Strategies or
courses of
action open
and available to
them
Their preferences over the end-states to which
combinations of actions chosen by various players
lead.
Their beliefs
about
important
parameters
such as others’
preferences

Example Rody has two classmates
whom he wants to be
friends with: Harry, a
social outcast but has the
newest action game and
Bong, the most popular in
the class but does not like
action games

Example
Rody’s first level of cost- benefit analysis is choosing between
having the chance to play the newest action game or not
His second level of cost- benefit analysis is choosing
whether he would like to be associated with a social
outcast or with the most popular school.
The rational choice for Rody would be
dependent on which is more important to him–
to play the game or to be associated with the
popular crowd.

 This example provides the basic principle of rational choice
theory wherein preference plays an important role in decision-
making, while the individual rationalizes the burdens and
benefits of the available choices. This example also highlights the
basic assumptions of rational choice theory which are the ff.
 1. Individuals act purely on self- interest.
 Individuals understand their interests enough to rationally
categorize them according to what they most prefer.
 Preferences are transitive in nature. This means that choices
have hierarchical order, and that the highest preference will
always be favored.

PRISONER’S DILEMMA
Two recently released convicts committed a crime
Investigations of the case lack sufficient evidence
to prove their guilt
Two suspects held in separate rooms where they
were told that if they tell on the other, they would
be freed

PRISONER’S DILEMMA
This condition allows one of them to go free, while
the other faces incarcerated
This example proves that individual self- interest
weight heavily in the process of choice making
The underlying structure of rational choice theory is
the weighs more heavily is the incentive to do what is
beneficia, to the individual

Historical Roots of
Rational
Choice Theory

Humanity’s unlimited wants and perpetual desires drove
civilizations to either their prominence or destruction
With natural resources being finite and the requirements
of human ambition unending, the most rational choice is to
conserve the limited resources and share these with each
other
However, the problem is that individuals only seek self-
interest and would end deciding what benefits them the
most.

• The tragedy of the common is a scenario wherein a common piece of
land is shared for grazing by community. Because the grass that grows
on the land is limited, farmers need to limit their herd when grazing
so that the land could keep up with the requirements of the
community.
• The tragedy in this scenario starts when a farmer lets his herd graze
more than what is allotted, thinking that such action would provide
him with better profits.
• If the farmers would all think of the same, the land will eventually
become useless to the community.
• When the land is already unusable, the farmer would just resort to
letting his herd graze more because after all, there will be nothing left.

• Plato discussed in his “The Republic”
this very notion of exploitation by the
unchecked freedom of people.
PLATO
• Without justice, people would consume
as much as they like and would
eventually deplete the resources
common to all.
• Thomas Hobbes philosophized that the
only thing could prevent the pillaging of
public or common goods is the absolute
monarch, which he calls Leviathan.

CRISTICISMS AND LIMITATIONS
Neglect of ethical and moral standards
Personal interests, power and wealth
Not strict with the method and the product decision-making;
rather it analyzes the outcome, and the preferences based on
what is optimal and ultimately beneficial for the individual actor
The tragedy of the commons and others reflects today’s society– the
widening gap between the poor and the rich, rising global
temperatures, and political corruption. These events can affect the
weighing personal gain over the good for many

1. Rational Choice Theory assumes that
individuals:
a) Are driven by altruistic motives
b) Have limited information
c) Make decisions with the goal of maximizing
their personal benefit
d) Act unpredictably

2. According to Rational Choice Theory, when
making a decision, individuals will:
a) Always act in ways that benefit society as a
whole
b) Evaluate the costs and benefits of each option
c) Rely on intuitive judgments rather than
calculation
d) Follow social pressures without consideration
of personal gain

3. Which of the following is a key criticism of
Rational Choice Theory?
a) It assumes that all individuals have perfect
information
b) It focuses too much on collective outcomes
c) It neglects the influence of emotions and
social factors
d) It assumes that people always make irrational
decisions

INSTITUTIONALISM
Institutions– patterns, routines, norms, rules, and schemes
that govern and direct thought and action.
Aims to understand and analyze how actions,
thoughts, and meanings penetrate into the social
consciousness deeply enough to embed themselves
into the social psyche.
Claims that institutions persist because of the reason that
they came about in the first place: social legitimacy and
survual.

INSTITUTIONALISM
Institutions– patterns, routines, norms, rules, and schemes
that govern and direct thought and action.
Aims to understand and analyze how actions,
thoughts, and meanings penetrate into the social
consciousness deeply enough to embed themselves
into the social psyche.
Claims that institutions persist because of the reason that
they came about in the first place: social legitimacy and
survival.

DISS- RATIONAL CHOICE THEORY .powerpoint

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