rational choice theory

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rational choice theory

a 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):

  1. 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;
  2. 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.
Collins Dictionary of Sociology, 3rd ed. © HarperCollins Publishers 2000
References in periodicals archive ?
These group identities narrow "the limitations of individual rationality" (p.
To gain the needed motivation, monetary policymakers should recall the "traveler's dilemma," a game theory parable that highlights the pitfalls of individual rationality.
To gain the needed motivation, monetary policymakers should recall the "traveller's dilemma," a game theory parable that highlights the pitfalls of individual rationality. The parable features a group of travelers, returning home with identical pottery purchased on a remote island.
Theoretical and simulation results show that our strategy provides a feasible solution to improve spectrum utilization, can maximize overall utility and guarantee users' individual rationality.
To uphold the cooperative scheme, both group rationality and individual rationality are required to be satisfied at any time.
* Benjamin Roth, MIT, and Ran Shorrer, Pennsylvania State University, "Making It Safe to Use Centralized Markets: Epsilon-Dominant Individual Rationality and Applications to Market Design"
Likewise, a country's prosperity can be measured properly only by including elements of moral philosophy and sociology, which fall outside of the boundaries of wealth creation and individual rationality that form the domain of conventional macroeconomic analysis.
Individual rationality is grasped as a result of cultural convention.
I can only think it's the British public's innate conservatism and distrust of individual rationality that causes cycling to be seen as odd or degrading, rather than an everyday part of life, as it is on the continent.
William De Vijlder, chief investment officer of France's BNP Paribas Investment Partners, has looked at this phenomenon on his blog, dubbing it "individual rationality, collective irrationality".
It is expected that individual rationality will mediate participants' processes of health-related information, interact with the message content variable, and thus conjointly affect their short-term changes of attitude toward healthy diets (H1) and behavioral intentions (H2).
3.1) * Individual rationality: perfect problem understanding, consideration of al consequences of decision * Preference orders: axioms of completeness and transitivity, ordinal scaling (if no further assumptions) * Assumption of cardinal scaling in game theory: intensity of preferences (monetary value) is known * Aggregation of preferences: attempt of [less than or equal to] 2 agents to achieve Pareto-efficient (collectively rational) agreement Fig.

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