2

Rational choice
theory
DISCIPLINES AND IDEAS IN THE SOCIAL
SCIENCES
SECOND QUARTER, FIRST SEMESTER
Learning outcome
• Analyze the basic and
principles of the major
social science ideas:
rational choice theory.
 Topic outline
Thinkers and their
1 What is Rational
Choice Theory? 4 Contributions

Strengths and
2 Historical Context of
Rational Choice 5 Criticisms
Theory
Key Concepts of
3 Rational Choice
Theory
What is
rational
choice
theory?
rational
• People act based on or
choice
• Act of selecting or making a
in accordance with decision when faced with
reason or logic. two or more possibilities.
Rational choice theory
• It is an economic theory used in
framing individual behavior to
easily predict individual
preferences and choices.
Rational choice theory
• Its essence is that ‘when faced
with several courses of action,
people usually do what they
believe is likely to have the
best overall outcome’.
Rational choice theory
• Individuals’ actions are based on their
preferences, beliefs, and feasible
strategies. (Ward, 2002)
• It is the view that people behave as they
do because they believe that performing
their chosen actions has more benefits
than costs. People make rational choices
based on their goals, and those choices
govern their behavior.
Historical
context
of rational
choice theory
Historical context
• The beginnings of the foundations of rational
choice can be traced to the age of reason,
according to Joe Oppenheimer (2008),
Emeritus Professor in the Department of
Government and Politics at the University of
Maryland.

18th century
Historical context
• In his book Leviathan, Thomas Hobbes
tried to explain that basic functioning of
political institutions through individual
choices and postulated that choices
came from universally held desires and
dislikes.

1651
Historical context
• Adam Smith emphasized the likely social
functionality of Hobbes’ simplifying notion
of egotism, when he asserted in his
“Wealth of Nations” that “it is not from the
benevolence of the butcher, the brewer, or
the baker that we expect our dinner, but
from their regard to their own interest”.

1776
Historical context
• American sociologist George Homans was
credited for establishing rational choice in
sociology when he formulated social
exchange theory which was grounded from
the assumptions drawn from behaviorist
psychology.

1960s
Historical context
• Social exchange theory is a concept based on
the notion that a relationship between two
people is created through a process of cost-
benefit analysis. In other words, it’s a metric
designed to determine the effort poured in by
an individual in a person-to-person
relationship.

1960s
Historical context
• Later on, more formal, mathematical
models of rational action were
developed converging with trends in
microeconomics.

1960s
Historical context
• Rational choice has been used to explain themes
such as voting, coalition formation, ethnic relations,
social mobility, class reproduction, crime, and
marriage.
Key
concepts
in rational
choice theory
Basic assumptions
in rational choice theory
Utility Decision-making
1 maximization 3 under conditions of
uncertainty

Structure of Centrality of
2 preferences 4 individuals in the
explanation of group
outcomes
 1 Utility maximization
• People make decisions
about how they should act
by comparing the costs
and benefits of different
courses of action.
 Structure of
2 preferences
• People are motivated by their
personal desires and aspirations
but since it is not possible for them
to attain all of the things that they
want, they must make choices
related to their goals and the
means for attaining those goals.
 Structure of
2 preferences
• Human behavior is identical with
animal behavior in that both are
not free but determined. They are
both shaped by rewards and
punishments encountered. Such
determining factors are also
known as conditioning.
 DECISION-MAKING
UNDER
3 CONDITIONS OF
• It meansUNCERTAINTY
that each individual
takes full advantage of the
likely worth of his own payoff.
• The focus is on the expected
rather than actual usefulness.
 Centrality of individuals
4 in the explanation of
group outcomes
• Social phenomena can be
explained in terms of the
individual actions that led to
those phenomena. This means
that basic unit of social life is
individual human deed.
thinkers
and their
contribution
s
Thinkers and their contributions

Gary becker
• His major contribution was perhaps
the ability for having extended the
realm of microeconomic investigation
to a broad extent of human behavior
and interaction such as
discrimination, crime and
punishment, human capital, families,
and organ market.
Thinkers and their contributions

George homans
• His theoretical contribution was the formation
of more integrated social science on a firm
theoretical basis and developed the deductive
and inductive approaches to theory.
• In his book The Human Group (1950), he
intended to move away from the study of the
social system as it is epitomized in single
groups toward a study of the system as it is
epitomized in many groups.
Thinkers and their contributions

George homans
• In his book Social Behavior: Its Elementary
Forms (1961/1974), he explained the principles
of behavioral psychology and elementary form
of social behavior in small groups.
• His Exchange Theory posits the belief that
individual beings and behavior are pertinent to
comprehending society, that is people will
perform an action depending on their insight of
the likelihood of success.
Rational choice
theory:
strengths
and
criticisms
Rational choice theory:

strengths
• GENERALITY – Properties that are shared by multiple
objects or actors.
• PARSIMONY – Identifying the simplest, least
complicated explanation of a situation or observation.
• PREDICTIVE – The decisions of individuals depend
on the structures and assumptions.
Rational choice theory:

CRITICISMS
• One issue would be the difficulty encountered by individuals to
make decisions in case of inadequate information and
uncertainty, in which case they may resort to other ways of
making decisions, hence the rational choice assumption that
individuals make decisions based on getting maximum benefits
at the least possible cost will not apply.
• Human social action and interactions are complex and rational
choice theory may not be able to explain all these complexities.
Rational choice theory:

CRITICISMS
• Difficulty of explaining macro level structures and
institutions simply from the models of individual social
action.
• The rational choice assumption that almost everything
humans do is rational is problematic since not all
human actions are rational.
Thank you
for
listening
PREPARED BY:
REIVEN S. TOLENTINO, LPT
TEACHER I