Politics & International Relations
Rational Choice Theory
Rational Choice Theory is a framework that assumes individuals make decisions based on rational calculations to maximize their own self-interest. It is often used to analyze political behavior and decision-making processes. This theory suggests that individuals weigh the costs and benefits of different options and choose the one that best serves their interests.
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12 Key excerpts on "Rational Choice Theory"
- H. Wiarda(Author)
- 2010(Publication Date)
- Palgrave Macmillan(Publisher)
4 C h a p t e r 7 Rational Choice Theory: Why Irrationality Makes More Sense for Comparative Politics J. D. J. Nakaska Introduction Rational Choice Theory (RCT) has emerged as one of the leading methodologies in political science. RCT studies have permeated the field since the 1950s. With the increasing quantification of the social sciences, RCT provided the way in which economic models and approaches were transferred to political science in an attempt to improve consistency and analysis. Economic theories prior to this were generally applied to the economic policies and behaviors of countries related to trade and commerce. RCT is a utility-maximization methodology, by which choices are made on the basis of the “best interest” of the actor making the selec- tion. Gerardo L. Munck summarizes RCT quite nicely. He states that “it bears stressing that RCT is first and foremost a theory of decision- making that rests on the expected utility principle, which states that individuals make decisions that maximize the utility they expect to derive from making choices.” 1 Simply put, RCT presupposes that given the option between two choices, one of which will maximize potential gains and the other of which will produce a suboptimal gain, individu- als will choose the option that serves their individual needs best. The two main features of Rational Choice Theory are that it is a theory of decision-making based on expected utility and that it is an (actor) 128 J . D. J . N a k a s k a agent-based theory. There are two main branches of RCT: decision theory and game theory, which is generally considered the most appro- priate for politics. In this context, true rationality occurs when actors, be they individuals or nation-states, make choices based on expected utility. Simply put, RCT posits that choices will be made that bring the greatest return and the least cost. Background of Rational Choice Theory RCT has a multitude of definitions that tend to confuse the issue.
eBook - PDF- H. George Frederickson, Kevin B. Smith, Christopher Larimer, Michael J. Licari(Authors)
- 2018(Publication Date)
- Routledge(Publisher)
196 8 Rational Choice Theory and Irrational Behavior Introduction: What Is Rational Choice Theory? For public administration scholars, rational choice can be simply thought of as neoclassical economic theory applied to the public sector. It seeks to build a bridge between microeconomics and politics by viewing the actions of citizens, politicians, and public servants as analogous to the actions of self-interested pro-ducers and consumers (Buchanan 1972). This analogy not only makes it possible to conceive of the public sector in market terms but also makes available to public administration scholars a well-developed set of theoretical tools from economics. The terminology for these tools varies (they are sometimes called political econ-omy or welfare economics), but they are best known and most widely applied as rational or public choice. The intellectual roots of rational choice date back at least to the work of Adam Smith, whose The Wealth of Nations (first published in 1776) is the intellectual rock on which neoclassical economic theory is constructed. Smith’s great insight was that people acting in pursuit of their own self-interest could, through the mechanism of the “invisible hand,” produce collective benefits that profited all society. For example, businessmen might be motivated only by a desire to enrich themselves, but their ability to turn a profit depends upon producing cheaper, better-quality goods than their competitors. Higher-quality goods at lower prices benefit everyone. If this is true, it implies that social order and collective benefits can be produced by market mechanisms rather than by the strong centralized hand of government. These basic elements—the self-interested actor, competi-tion among producers, and a relatively unregulated market—are the hallmarks of neoclassical economic thought and central to Rational Choice Theory.
- William Outhwaite, Stephen Turner, William Outhwaite, Stephen Turner(Authors)
- 2007(Publication Date)
- SAGE Publications Ltd(Publisher)
Rational choice theories are predicated on the notion that individual actors pursue their goals efficiently. These individuals may have a great deal of information or none at all, but based on their understanding of the alterna-tives before them, they select the course of action that promises to deliver the greatest net benefits. The nature of these benefits varies from one Rational Choice Theory to the next. Sometimes individuals are said to seek money or re-election, but the ends that they pursue need not be self-serving in nature (cf. Becker, 1976; Downs, 1957; Olson, 1965; Schelling, 1960). Although rational choice theories tend to assume selfish goals, nothing in Rational Choice Theory precludes the theo-rist from stipulating tastes for altruism or, for that matter, self-destruction (Margolis, 1982). If a man desires to hang himself, rationality merely dictates that he follow what he believes to be an efficient route to the nearest cord of rope. The defining char-acteristic of Rational Choice Theory is not what it assumes about human objectives but rather the notion that individuals pursue their aims efficiently. Although rational choice theories need not be confined to the domain of selfish motives, it is nevertheless true that many such theories assume that individuals seek money, power and (occasionally) prestige. In part, these assumptions about core motives reflect the intellectual origins of this type of scholar-ship. Microeconomists have played a domi-nant role in developing both the technical and substantive aspects of Rational Choice Theory, and the most compelling accounts of strategic profit-minded behavior are those involving economic markets. Another reason has to do with the broader theoretical objective of eliminating logical inconsistencies in accounts of human behav-ior.
eBook - PDF- Stephen Parsons(Author)
- 2005(Publication Date)
- Continuum(Publisher)
CHAPTER 6 Rational Choice Theory: a Science of Politics? We have noted on a number of occasions that according to its advo-cates one of the advantages of adopting RCT for the investigation of political phenomena is that it allows for the provision of 'scientific' explanations in politics. Although there is considerable dispute con-cerning exactly what constitutes a 'scientific' explanation, two factors that are frequently mentioned, and have already been alluded to, are empirical success and the identification of relevant causal factors. It has previously been suggested that the ability of models incorporating RCT to provide empirical explanations and/or predictions of political phenomena is, at best, contested, and hence the scepticism displayed by authors such as Green and Shapiro concerning the empirical validity of RCT in connection with political phenomena does appear justified. However, proponents of RCT, even if they accept that the empirical validity of RCT in explaining political phenomena is suspect, might counter with two arguments. Firstly, it might be argued that this empirical failure merely indi-cates the need for developing more sophisticated models of political processes. The assumption here is that, because RCT has been found to be empirically valid in investigations in disciplines such as eco-nomics and decision theory, it is only a matter of time before this success is replicated in politics. Secondly, it might be argued that the main force of RCT does not derive from its empirical validity, but from its theoretical adequacy. Thus Shepsle argues that 'the comparative advantage of rational choice theorists lies in deriving theoretical propositions and advancing theoretical arguments; empirical assessment is a secondary matter' (Shepsle, 1996:219. See also Johnson, 2003). This chapter will critically evaluate both of these claims.
eBook - PDFInstitutional Theory in Political Science
The New Institutionalism
- B. Guy Peters(Author)
- 2011(Publication Date)
- Continuum(Publisher)
CHAPTER 3 Rational Choice Theory and Institutional Theory The second approach to institutions, which we will discuss, is to a very great extent the antithesis of the first. Indeed, the growing dominance of rational choice theories in political science was a principal concern motivating March and Olsen to advo-cate their normative version of “the new institutionalism.” Given that Rational Choice Theory depends for its analytical power upon the utility-maximizing decisions of individuals, it would appear that attempting to relate that theory to institutions and the constraining influence of institutions would be contradictory and inappropriate. Individuals are assumed to be autonomous and individualistic actors who are using any decision situations to maximize their own utility. Despite the individualistic basis underpinning their analytic approach, rational choice institutionalists have understood clearly that most political life does occur within institutions (see Tsebelis, 1990), and that to be able to provide a compre-hensive explanation of politics their theories must address the nature and role of political institutions. There, thus, has been a flowering of rational choice literature on political institutions, including legislatures (Tsebelis and Money, 1997; Kreppel, 2003), cabinets (Laver and Shepsle, 1995; Strom and Müller, 2008), bureaucracies (Miller, 2000; Huber and Shipan, 2002; Moe, 2006), the courts (Stearns, 2002; Hammond et al., 2005) and the institutions of the European Union (Pollack, 2007; see also Egeberg, 2004). These models have also been used to analyze whole political systems in comparative context (Scharpf, 2000; Tsebelis, 2002).
eBook - PDF- Ilkka Pyysiäinen(Author)
- 2010(Publication Date)
- De Gruyter(Publisher)
Section 5 concludes the paper. 1 Thanks to Aki Lehtinen for his helpful comments and to Mette Ranta for bib-liographic assistance. 2. Rational Choice Theory and Economic Behaviour RCT is the dominant theoretical approach in microeconomics. 2 It is also widely used in other social-science disciplines, in particular political science. In these disciplines the term Rational Choice Theory is often used in association with the notion of economic ‘imperialism’, implying that the use of RCT is an extension of economic methodology into their fields. Explicit theories of rational economic choice were first developed in the late 19 th century. These theories commonly linked choice of an ob-ject to the increase in happiness an additional increment of this object would bring. Early neoclassical economists (e.g., William Stanley Je-vons) held that agents make consumption choices so as to maximise their own happiness. In contrast to them, 20 th -century economists dis-associated RCT and the notion of happiness: instead of explicating ra-tionality of choice as a happiness-maximising effort they presented ra-tionality as maintaining a consistent ranking of alternatives. Such a rank-ing is commonly interpreted as agents’ desires or values. Without a foundation in an ultimate end the notion of rationality is reduced to the consistent ranking of choice alternatives, the consistent derivation of this ranking from evaluations of the possible outcomes, and the consistency of beliefs employed in this derivation. Thus, ‘ration-ality’ explicated in Rational Choice Theory is considerably narrower and possibly sometimes at odds with colloquial or philosophical notions of rationality. In such contexts ‘rationality’ often includes judgments about ends, the prudent weighting of long-term versus short-term re-sults, and insights into purportedly fundamental moral principles. Noth-ing of this sort is invoked in Rational Choice Theory.
eBook - PDF- D. Toke(Author)
- 2000(Publication Date)
- Palgrave Macmillan(Publisher)
As Albert Weale puts it (1992: 46), Rational Choice Theory ‘is based upon the notion of possessive individualists seeking to achieve their own pur- poses in competition with one another’. Hugh Ward says, of RCT, that ‘arguably the most important tool is game theory’ (1995: 77). Game theory involves modelling competitive behaviour wherein individuals seek to maximise their interests. The self-interests of the actors are D. Toke, Green Politics and Neo-Liberalism © Dave Toke 2000 derived from the attainment of that set of preferences which will maximise the utility (satisfaction) of the actor. RCT is used to predict outcomes, and also to explain past behaviour, although some rational choice analysts would argue that one of the acclaimed advantages of RCT, that of methodological parsimony, is eroded if it is used to explain in a causal sense (Elster 1986: 2). The usage by modern proponents of RCT has, ironically, to be distin- guished from many of the authors who brought it to prominence in the first place. Many of the central ideas (on environmental themes, at least) of ‘classic’ RCT authors like Olson, Hardin and Downs, seem today, when related to environmental policy at least, to be seriously at fault, and indeed some of the most penetrating critiques have been penned by rational choice adherents themselves.
- Ian C Jarvie, Jesus Zamora-Bonilla, Ian C Jarvie, Jesus Zamora-Bonilla, Author(Authors)
- 2011(Publication Date)
- SAGE Publications Ltd(Publisher)
14 Rational Choice Theory C é d r i c P a t e r n o t t e INTRODUCTION An individual has to choose between differ-ent courses of action, the consequences of which she is uncertain about. How should she choose? We now observe her choice. How can we make sense of it? Those are the two questions that Rational Choice Theory (RCT) aims to answer. They correspond to the traditional philosophical distinction between taking a normative or a descrip-tive stance. Ideally, any theory of rational choice should take both, that is, first, tell us what choices we should make in any given situation, and second, enable us to find out what behaviour can be called rational. The normative answer that RCT provides can be expressed by the following slogan: an agent should choose the course of action that leads to what she thinks are the best consequences. In other words, RCT relies on the fundamen-tal tenet that agents should make optimal choices. 1 As for the descriptive part, RCT tells us that an agent’s observed behaviour can be called rational as soon as we find out how she could see it as optimal. A few preliminary remarks are in order. First, the RCT slogan makes it obvious that it is a consequentialist (or instrumental) theory. Courses of actions are evaluated solely in terms of the results they bring about. At first glance, this excludes cases where agents choose an action because they believe it is intrinsically good, for instance when it is prescribed by moral principles or when it has been ordered by someone the agent defers to. Second, the explanations that RCT pro-vides are predicated on only two types of mental states: beliefs and desires. An agent’s needs to estimate the various consequences of her available actions, which correspond to her having beliefs about the state of the world. She also needs to evaluate and rank outcomes, which correspond to her having desires, or preferences, about every possible consequence of her actions.
eBook - PDF- Louis Putterman(Author)
- 1996(Publication Date)
- Yale University Press(Publisher)
Robert E. Lane WHAT RATIONAL CHOICE EXPLAINS Rational choice theories have been falsified by experimental tests of economic behav-ior and have not been supported by analyses of behavior in the market. Politics is an even less fertile field of application for rational choice theories because politics deals with ends as well as means, thus preventing ends-means rationality; voters have par-tisan loyalties often fixed in adolescence; political benefits have no common unit of measurement; rational ignorance inhibits rational choices; and there is no market-like feedback to facilitate learning. Research comparing public and private efficiency does not support rational choice. Ironically, while law and business schools are now employing better microeconomic theories, political scientists are taking up Rational Choice Theory, regardless of the disconfirming evidence. It was a brilliant, simplifying question: Could one account for economic behavior by observing the relations of supply and demand to prices while assigning market participants only two qualities, rationality, meaning stable, transitive preferences, and greed, meaning the attempt to maximize the achievement of these preferences? If one could do so, then by adding a few assumptions about market circumstances, budget constraints, competition, and information, one could specify the conditions for market equilibrium. Kenneth Arrow (1987, 204) reports that for the marginalists (chiefly Jevons, Walras, and Menger), the rationality hypothesis was the maximiza-Robert E. Lane, a former president of the American Political Science Association and the Eugene Meyer Professor Emeritus of Political Science, Yale University, P.O. Box 208301, New Haven, CT 06511, telephone (203) 432-3266, telefax (203) 432—6196, is the author of The Market Experience (Cambridge, 1991). 107 io8 tion of [consumer] utility under a budget constraint.
eBook - PDF- Andrew Hindmoor, Brad Taylor(Authors)
- 2017(Publication Date)
- Red Globe Press(Publisher)
216 Chapter 9 Rational Choice Explanation Introduction Rational choice theorists do not simply try to describe political actions and events. They seek to explain them. That is they try to show not only what happened in some particular case but why it happened and, in doing so, to make something which had previously appeared puzzling seem entirely explicable. Rational Choice Theory can be used to explain why parties frequently converge upon the centre ground (Chapter 3); why minority governments can survive for long periods (Chapter 4); why groups which share a common interest do not always mobilize to advance that interest (Chapter 6); and why the rent-seeking industry is relatively small (Chapter 7). Does Rational Choice Theory offer good explanations? This is an important but difficult question. It is impor-tant because, ultimately, criticisms of Rational Choice Theory amount to a claim that it does not offer good explanations. It is a difficult question Overview : Rational Choice Theory seeks to explain political actions, events and outcomes. But what does explanation require? This chapter identifies two general accounts of explanation drawn from the philos-ophy of social science. The first, positivism, equates explanation with the identification of general laws and equates explanation with pre-diction. The second, scientific realism, equates explanation with the identification of causal mechanisms and is more sceptical about the possibility of successful prediction. In the opening chapter we noted that the development of Rational Choice Theory in the 1970s and 1980s was threatened by Green and Shapiro’s (1994) argument that rational choice had a poor empirical record. If Rational Choice Theory is tied to a positivist account of explanation then Green and Shapiro’s argument is potentially devastating. If, on the other hand, we associate rational choice with the search for causal mechanisms, this same criticism is less damning.
eBook - PDF- Stella R Quah, Arnaud Sales, Stella R Quah, Arnaud Sales(Authors)
- 2000(Publication Date)
- SAGE Publications Ltd(Publisher)
For example, work in economic history on the emergence and effects of property rights (North and Thomas, 1971; North, 1981, 1990) demonstrated the importance of social institutions and institutional change for macro societal change (modernization) and economic progress. Other work, following seminal contributions by Coase (1937), Simon (1982), Williamson (1975, 1985) and others shaped the direction of work in organizational and economic sociology (see Milgrom and Roberts, 1992 for an original and comprehensive survey from the perspective of management science and business economics). Rational Choice Theory in Sociology: A Survey 54 B. Rational Choice: The Model of Man Rational action generally means choosing among alternative courses of action in accordance with certain rationality postulates. RC theory explains human behavior by using rationality postulates that depend on features of the situational context faced by the actors. In the following we will mention three classes of rationality postulates that refer to different kinds of contexts. The postulates are mutually consistent and form a unified and general theory of rational behavior (cf. Harsanyi, 1977 for a fine explication of this theory). B.1. The Basic Model: Restrictions and Preferences The basic model of man RC uses is closely related to neoclassical economic theory. It is assumed — of course simplifying complexities of real social situations — that actors know for certain what the consequences of their actions will be. The general idea is that those actions are chosen which will have the best consequences in terms of the actor’s own aims. A second idea that seems trivial at a first glance is that not all courses of action will be realizable. That is, there are always restrictions on the set of actions an actor may choose from. Intuitively, one could characterize rational behavior by pointing out two kinds of filter processes on the level of the individual (cf. Elster, 1984: 112–115).
eBook - PDFRational Choice Theory
Potential and Limits
- Lina Eriksson(Author)
- 2011(Publication Date)
- Red Globe Press(Publisher)
The bounded rationality approach is sometimes taken to concern how we actually reason (or perhaps can be normatively required to reason), according to which people will not always act in the best possible way because the decision-making process required for maximization is beyond human capac-ity. But sometimes the bounded rationality approach is instead taken to focus on what non-calculative ways people have for achieving results which actually are rather optimally in their self-interest ; this is for example what the focus on ‘fast and frugal’ heuristics, as Gigerenzer calls it, is all about. The evolutionary approach, on the other hand, usually focuses completely on inter-ests. There is some mechanism such as a selection pressure or social learning which makes agents act in their interests (at least the agents What is Rational Choice Theory? 55 we will be able to observe after a while will all do so). Fruitful explanation thus consists in showing why a particular behaviour is in the agents’ interests. From this overview, it is obvious that the RC umbrella covers many different approaches to the explanation of political behav-iour. They are not merely different in some of the details but differ also on the fundamental issues. It is also clear, or should be, that criticism directed at one type of RC theory or approach often fails to hit another. In the absence of explicit statements about what we mean when we talk about RC theory it is therefore likely that crit-ics will feel that RC theorists stubbornly fail to acknowledge criti-cism, whereas many RC theorists will feel unjustly accused of doing research in ways that would never occur to them.
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