rationality(redirected from Rational economic actor)
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- action which is effective in achieving the purposes which it is intended to achieve, i.e. the means are appropriate to the ends. In such a definition of instrumental rationality, no attempt need be made to appraise the rationality of the ends themselves. This conception of rationality, in which economic actors are assumed to seek to maximize their own economic returns, is often the basis of theorizing in ECONOMICS, much of this operating by the construction of idealized models (see IDEAL TYPES). For further conceptions of rational action, and questions about these, see FORMAL AND SUBSTANTIVE RATIONALITY, TYPES OF SOCIAL ACTION.
- knowledge of beliefs which have been established scientifically, or on some other basis considered ‘rational’. Such beliefs are implied in 1 , but the ‘rationality’ of knowledge and beliefs raises wider issues than the instrumental effectiveness of knowledge or beliefs, e.g. extensive philosophical debates (see EPISTEMOLOGY, ONTOLOGY, SCIENCE, RATIONALISM).
A rather different point is that many activities which at first sight appear ‘irrational’, on closer examination may be found to possess ‘latent functions’ (see LATENT AND MANIFEST FUNCTIONS), e.g. the ‘conservatism’ of many people in THIRD WORLD SOCIETIES, who may benefit economically, especially in old age, from having more children. In wider terms, ‘nonrational beliefs’, notably RELIGION, may perform general social functions, e.g. providing social integration (see also FUNCTIONALIST THEORY OF RELIGION). Such beliefs are sometimes regarded as encapsulating an accumulated institutional rationality, perhaps linked to survival. Conversely, actions which appear ‘rational’ from the narrow perspective of immediate instrumental rationality (e.g. cutting down the Brazilian rain forest) may be seen as ‘nonrational’, taking a wider view.
What all these considerations show is that the idea of’rationality’ is often difficult to define. While rationality in its simplest sense, l , can sometimes be established without undue difficulty, only rarely can the means to an end be fully ordered (e.g. in terms of cost, availability, etc.), and actors often lack other salient information, even when this is potentially available (see THEORY OF GAMES, RATIONAL CHOICE THEORY, SATISFICING, BOUNDED RATIONALITY).