rational choice theory(redirected from Economic choice)
Also found in: Wikipedia.
rational choice theorya relatively formal approach to sociological and social science theorizing (e.g. drawing upon the THEORY OF GAMES notion of STRATEGIC INTERACTION and ECONOMICS), in which it is maintained that social life is principally capable of explanation as the outcome of the ‘rational choices’ of individual actors.
‘When faced with several courses of action, people usually do what they believe is likely to have the best overall outcome. This deceptively simple sentence summarizes the theory of rational choice’ (Elster, 1989). It is a form of theorizing characterized by the use of technically rigorous models of social behaviour, which seek to derive robust conclusions from a relatively small number of initial theoretical assumptions about ‘rational behaviour’.
Rational choice theories have been in vogue over the last two decades, prompted by dissatisfaction with macroscopic and structural models in some circles but also by an increased centrality for the rhetoric of individual rational choice in many areas in economic and political life. Despite its often impressive formal architecture, and its undoubted value in illuminating some areas of social reality, two important limitations of rational choice theory can be noted (see Hollis, 1987):
- its relative lack of success in overcoming numerous technical difficulties (e.g. a regress in actors’ expectations concerning the actions of others), which limit its formal rigour and undermine the direct applicability of its models;
- an association with positivist and pragmatist epistemologies, which has limited its attention to analysis of action located in norm-guided, rule-following and rule-changing social behaviour. see also EXCHANGE THEORY.