For Rational Choice Theory in criminology, see Rational choice theory (criminology)

In the most general sense, rational choice theory describes human behavior by specifying laws of human decision making. Its two implicit assumptions are that: i) decisions determine behavior and ii) decisions follow a set of general laws. Rational choice theory is an individualistic methodology and as such conceives of social situations or collective behaviors as being results of individual actions. Just as Newton's Laws describe the motion of particles, rational choice theory describes the behavior of individuals. And, just as particles minimize potential energy, humans maximize their expected utility. The rational choice approach finds itself in models for both human behavior and behavior of non-human but nonetheless potentially rational entities, such as corporations or nation-states. It is particularly important in sociology, political science, and economics.

Rational choice theory is a way of looking at deliberations between a number of potential courses of action, in which "rationality" of one form or another is used either to decide which course of action would be the best to take, or to predict which course of action actually will be taken. Obviously, what is taken as "rational" is of chief importance here. This varies with context:

• The technical meaning in economics is about preferences: preferences are defined to be rational if they are complete and transitive. That is, that the decision-maker is able to compare all of the alternatives, and that these comparisons are consistent. See the preferences page for further explanation.
• If uncertainty is involved, then the independence axiom is often assumed in addition to rational preferences.
• If decision-making over time is involved, time consistency is generally assumed as well.
• Rationality implies that the decision-maker always chooses the most preferred option, as in the Utility Maximization Problem.

Often, to simplify calculation and ease prediction, some rather unrealistic assumptions are made about the world. These can include:

• An individual has precise information about exactly what will occur under any choice made. (Alternatively, an individual has a reliable probability distribution describing what will happen under any choice made.)
• An individual has the cognitive ability to weigh every choice against every other choice.
• An individual is aware of all possible choices.

Sometimes these assumptions have the status of "as if" propositions—statements that are not meant to be literally true but that predict the behaviors individuals are believed to exhibit.

Both the assumptions and the behavioral predictions of ""rational choice theory"" have sparked criticism from a number of camps. Some people have tried to create models of bounded rationality, which try to be more psychologically plausible without completely abandoning the idea that some kind of reason underlies decision-making processes. For a long time, a popular strain of critique was a lack of empirical basis, but experimental economics and experimental game theory have largely changed that critique (although they have added other critiques, mainly by demonstrating some human behavior that consistently deviates from rational choice theory). Early critiques of the rational choice approach in political science for example, argued that the rational choice theorists could not explain why people voted, much less make more sophisticated arguments about political behavior.

Rodney Stark has been a major proponent of the Rational Choice Theory within the sociology of religion. Using the Rational Choice Theory he has provided strong theoretical frameworks for analytically understanding the development and eventual success of some new religious movements. Based on his findings, he has presented a theory on the development of early Christianity, based on Networks of Faith, rather than miraculous mass conversions. The Networks of Faith Theory in turn made possible the theoretical prediction of LDS growth in the period c.1970-2005; a feat Stark was originally scorned, but ultimately applauded for.

Why rational choice theory?

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One question that can be asked is why people try to base their models on concepts such as "reason", "preferences", and what is implied by them, free will. Some potential reasons:

• They see people as "rational" beings, and thus believe that a model in which they are represented as such should be reasonably accurate. This has been especially significant and relevant in the sociology of religion, where the Enlightenment ideas of religion and religiosity has re-constructed religious people as ultimatelly irrational agents. This has in its own turn made possible correspondence with expanding cognitivist approaches to the study of religion.
• Assumptions of rationality have useful formal properties.
• The individualistic methodology and the mathematical formalization of rational choice behavior allow for an easier understanding of complex social phenomena.

Various researchers have found some limits to this theory, under the name of bounded rationality, an element used for example in behavioral economics.

See also

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• Framing (economics)
• Homo economicus
• Neoclassical economics
• Organizational theory
• Rational expectations
• James Coleman
• Rational ignorance
• Rational pricing

External links

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• Rational Choice Theory - Article by John Scott

Social philosophy

Rational Choice-teorien | Theorie der rationalen Entscheidung | Acción racional | Racjonalne gospodarowanie | Rationaalisen valinnan teoria