Rational choice theory assumes that individuals make prudent, logical decisions that provide them the greatest personal benefit given available options and are in their highest self-interest. It posits that people are rational thinkers who have different interests and make choices in rational ways aimed at maximizing their own utilities or satisfaction, though a person does not fully control outcomes of their decisions.

1. RATIONAL CHOICE

2. RATIONAL CHOICE
 Rational choice theory is an economic
principle that states that individuals always
make prudent and logical decisions.These
decisions provide people with the greatest
benefit or satisfaction — given
the choices available — and are also in their
highest self-interest.

3. Basic Principles of Rational
Choice
 •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
toincrease their utilities.
 –A person does not have full control over the results
of herchoices

4. EXAMPLE SITUATIONS