Rational Choice Theory

Rational Choice Theory

- Rational choice is not static but is an active research
program, responding to outside criticism.
- This open ups the possibility of modelling communication of
information, including false disclosure of private
information.
Essence: When faced with several courses of actions, people usually
do what they believe is likely to be “right”.
 Best overall outcome
 Not free standing – they choose “this” because of social
factors on how they perceive things or their interests.
 Best regard as a toolkit rather than as an approach.
1950s to 1960s
- Rational Choice Theory arose as a part of the behavioral
revolution in American Political Science.
- Sought to examine how individuals behaved through empirical
methods.
Anthony Downs
- Pioneer in application of rational choice theory to electoral
behavior.
Mancur Olson
- Individuals would not always cooperate to achieve a “shared
goal”
Collective Action Failure
- Rational self-interest leads to everyone being worse off.
Fundamental Critiques:
1. Pluralism and Orthodox Marxism
- Shared interest is sufficient for political mobilization to
occur.
- Generated empirical work in areas as diverse as the study of
social revolution and cooperation between states over
problems.
2. Game Theory
- Other’s choice of strategy affects your best choice and vice
versa.
 3. Public Choice Subfield
 Central Theme: intervention of democratic governments to
repair market failure often creates more problems than it
solves.
 Rent-seeking
- Lobbying for monopoly or quasi-monopoly powers and subsidies
from states.
- Consequent erosion of market efficiency and slower economic
growth.
Key Commitments and Assumptions of the Mainstream Variant
- Often, individuals are self-interested (potentially extremely
elastic)
Mainstream Variant of Rational Choice Theory
- Individuals have all the rational capacity, no matter how
complex the choice.
Parametric decision making under certainty
- Each action has a known outcome
- Relation between actions and outcomes is unaffected by the
actions of any other individuals.
Criticisms:
1. Critique of those who wish particularly to emphasize bounded
rationality.
2. Sociological Critique – appears to downplay social structure
and holistic modes of explanation.
3. Psychologists’ Argument – individuals do not act rationally
in the standard sense and are motivationally and
psychologically complex.
4. Critique from Mainstream Political Science
- Implausibility of the assumptions made and predictive
failures of the model.
Bounded Rationality
- People will select between two actions, the one which they
think has the best possible outcome.
- Multiple possible actions – reduces chance of determining
which action to take.
According to works of Simon
 - Limited information, limited time, and limited cognitive
capacity;
- They will decide based on previous experiences
- Copy the decisions of successful individuals.
Sociological Critique
- In any given society --- rationality is based on what the
society believes to be rational.
- Do not act according what the society deem as rational is
irrational.
- In relation to bounded rationality, individuals tend to
follow dictated or implemented by society than make his or
her own decision.
Social Structure
- Each group or class has its own ideology which may influence
how an individual belonging to that group act and will
interact with members of the different group or class.
Norms
- Actions are based on what is deemed normal behavior in a
society he belongs with.
- Deviation is usually frowned upon.
Ideology
- Set of beliefs or ideals which forms basis for economic or
political policies.
- The rationality or irrationality of an action is determined
only on the context of why the individuals acted that way.
Rules and Conventions used to:
 Categorize problems
 Paradigmatic filters biasing the use of incoming information
 Limited efforts to search for available solutions
 Pressures to appear consistent
 Even at the cost of failures of goal attainment
 The upgrading of means into ends in themselves
 Other organizational pathologies
In contrast…
  The focus of much sociology is upon individual
interrelatedness. It is not that relationships exist between
fully constituted individuals: rather relationships modify
individual’s identity in crucial way.
Atomistic Picture
- Is painted by rational choice theory, is said to be line with
other individualistic ideologies which support the social
status quo by denying the existential reality of social
groups, communities, social classes and even societies.
Social Atom > Self-interested
- Rational choice modeling starts with given beliefs and
preferences, whatever their origin.
Psychologist’s Critique
- Envy is important and is incompatible with self-concern.
- They argue that the empirical evidence suggests that
individuals frequently act altruistically in political life.
- When individuals act in accordance with social norms, there
also often seems to be some sacrifice of self-interest.
- Normatively oriented rational choice is not wedded to the
self-interest assumption.
- Altruism is important
 One way around the problem of altruism is to suggest that
individuals get pleasure out of others’ happiness.
- Synoptically rational decision making
Margolis’ Model
- Allows for change in relative weight attached to self-
interest and others’ interest, more weight being placed to
self-interest given the extent to which the individual has
been altruistic in the past.
The critique from mainstream political science
- Rational choice has a poor empirical record
- Rational choice models are “Slippery”, are not directly
measurable.
- Does not require that individual preferences reflect self-
interest: so long as preferences are well defined, generating
a partial ordering of the options, modelling can proceed.
- Some combination of self-interest and altruism will always
give the right prediction.
(Green and Shapiro): The keys
1. Ad Hoc
- The rationality assumptions by making Ad hoc modifications to
the motivational model.
2. Post Hoc
- Modelers typically ‘explain’ a well-known Phenomenon in terms
of a model derived at least in part through inductive
reasoning from the observed cases, then use those cases to
test the model.