The paper addresses the ‘rational choice only’ reconstruction, characterization, and interpretation of classical and neoclassical economics. It argues that such a reconstruction is inaccurate failing to do justice to the dual theoretical character of classical/neoclassical economics. The paper instead proposes and shows that the latter involves not only elements of ‘rational choice theory’ but also those of an alternative conception. It identifies various and important ideas, observations, and implications of irrational choice and action within (...) classical/neoclassical economics. One class of such ingredients involves forms, expressions, and cases—i.e. specification and classification—of irrational choices in the economy. Another class comprises the social and other factors—i.e. economic sociology or social economics—of irrational choices in the economy. The paper’s intended contribution is to help identify and clarify the extant sources and alternatives of rational choice theory in conventional economics.... (shrink)

Although rational choice theory has enjoyed only modest predictive success, it provides a powerful explanatory mechanism for social processes involving strategic interaction among individuals and it stimulates interesting empirical inquiries. Rather than present competing theories to compare against rational choice, Don Green and Ian Shapiro have merely alluded to alternative explanatory variables such as culture, institutions, and social norms, without showing either how these factors can be incorporated into a more powerful theory, or how (...) they are inconsistent with rational choice theory. It is likely that any eventual theory of the origin and maintenance of social institutions, norms, and values will have to reserve a central place for rational action. (shrink)

The critics of rational choice theory (RCT) frequently build on the contrast between so-called thick and thin applications of RCT to argue that thin RCT lacks the potential to explain the choices of real-world agents. In this paper, I draw on often-cited RCT applications in several decision sciences to demonstrate that despite this prominent critique there are at least two different senses in which thin RCT can explain real-world agents’ choices. I then defend this thesis against the (...) most influential objections put forward by the critics of RCT. In doing so, I explicate the implications of my thesis for the ongoing philosophical debate concerning the explanatory potential of RCT and the comparative merits of widely endorsed accounts of explanation. (shrink)

The paper argues that the philosophical underpinnings of rational choice theory are vitiated by consideration of the phenomenon of backward-looking motives, such as gratitude, fidelity, and many forms of honesty. Attempts to describe the actions and decisions of those acting from such motives in the terms of rational choice theory fail, and the model of human conduct which is implicit in the theory is both inadequate in itself and pernicious in its general influence. (...) A picture may emerge of the human person as a repository of atomistic ‘experiences’, inhabiting a present from the vantage-point of which his relations to past and future ‘selves’ are contingent, and his responsibilities and commitments correspondingly fluid. And in economics, a supposedly ‘neutral’ account of rational choice in fact encourages and sustains a simple-minded utilitarian ethic. (shrink)

In this paper, I review the literature on rational choice theory to scrutinize a number of criticisms that philosophers have voiced against its usefulness in economics. The paper has three goals: first, I argue that the debates about RCT have been characterized by disunity and confusion about the object under scrutiny, which calls into question the effectiveness of those criticisms. Second, I argue that RCT is not a single and unified choice theory—let alone an empirical (...) theory of human behavior—as some critics seem to suppose. Rather, there are several variants of RCT used in economics. Third, I propose that we think of RCT as a set of distinct research strategies to appreciate its diversity. This account implies that the effectiveness of any criticism depends on the variant of RCT we are considering. (shrink)

The descriptive viewpoint in rational choice has generated an important Standard Rational Choice Theory revision. This viewpoint has meant the introduction of relevant psychological considerations that Rational Choice Theory tied to the neoclassical economics is unable to heed In this paper I suggest a way to expand the descriptive viewpoint by theorizing how some factors, coming from the social and cultural environment, operate within rational choice. That troublesome issue concerning the (...) overall validity of economic laws is also a question here; specifically, if these descriptive proposals expand the explanation of the disturbing causes of economic laws, or if they actually call into question their fundamental principles, encouraging consideration of some economic issues in a quite new, different manner. (shrink)

Donald Green and Ian Shapiro discover a curious gulf between the prestige of rational choice approaches and the dearth of solid empirical findings. But we can understand neither the prestige of rational choice theory nor its pathologies unless we see it as a variant of the equilibrium analysis found in physics, economics, and biology. Only such a global perspective on rational choice theory will reveal its core assumptions and the likely shape of (...) its future in political science. In this light, the growing dominance of rational choice theory in political science is all but inevitable and its pathologies are all but inescapable. (shrink)

This article attempts to assess Jon Elster's contribution to rational choice in Ulysses and the Sirens and Sour Grapes. After reviewing Elster's analysis of functional versus intentional explanations, the essay moves on to the crucial distinction between the thin and broad theories of rationality. The former elabo rates on the traditional economist's preference / feasible set apparatus; the latter is the more demanding theory which inquires into the rationality of beliefs and preferences. Elster's approach to the broad (...) theory normally consists in using the thin theory as a reference point and in making purposefully limited departures from it. The essay illustrates the method while commenting on Elster's discus sion of autonomous preferences in Sour Grapes. It goes on to stress some impor tant analogies between Elster's use of the thin and broad theories, on one hand, and Weber's ideal-typical method, on the other. The final assessment is phrased in terms of these analogies; it is suggested that Elster is at his best when the ideal-typical method and his own separate from each other, that is, when he comes to grips with the broad theory in its own terms. (shrink)

James Coleman attempted to reconcile rational choice theory with the classical sociological concerns: the relationship between the individual and society, and the historical and normative status of rationality. He identifies limits to the rational choice model, and suggests some promising but ultimately unconvincing ways around them. His project does, however, offer an important critique of Weber's theory of bureaucracy, which is of value in analyzing relationships between corporate actors and particular persons.

The value of rational choice theory for the social sciences has long been contested. It is argued here that, in the debate over its role, it is necessary to distinguish between claims that people maximise manifest payoffs, and claims that people maximise their utility. The former version has been falsified. The latter is unfalsifiable, because utility cannot be observed. In principle, utility maximisation can be adapted to fit any form of behaviour, including the behaviour of non-human organisms. (...) Allegedly 'inconsistent' behaviour is also impossible to establish without qualification. This utility-maximising version of rational choice theory has the character of a universal 'explanation' that can be made to 'fit' any set of events. This is a sign of weakness rather than strength. In its excessive quest for generality, utility-maximising rational choice theory fails to focus on the historically and geographically specific features of socio-economic systems. As long as such theory is confined to ahistorical generalities, then it will remain highly limited in dealing with the real world. Instead we have to consider the real social and psychological determinants of human behaviour. (shrink)

The most common argument against the use of rational choice models outside economics is that they make unrealistic assumptions about individual behavior. We argue that whether the falsity of assumptions matters in a given model depends on which factors are explanatorily relevant. Since the explanatory factors may vary from application to application, effective criticism of economic model building should be based on model-specific arguments showing how the result really depends on the false assumptions. However, some modeling results in (...) imperialistic applications are relatively robust with respect to unrealistic assumptions. Key Words: unrealistic assumptions • economics imperialism • rational choice • as if • robustness. (shrink)

In his paper, ‘Patients, doctors and risk attitudes’, Makins argues that doctors, when choosing a treatment for their patient, need to follow their risk profile.1 He presents a pair of fictitious diseases facing a patient who either has ‘exemplitis’, which requires no treatment or ‘caseopathy’, which is severe and disabling and for which there is a treatment with unpleasant side effects. The doctor needs to decide whether the patient should pursue the unpleasant treatment, just in case he has caseopathy. Makins (...) believes that rational-choice theory is a productive way to approach this problem. This theory frames all decisions as gambles. Each possible gamble (eg, not to pursue treatment) leads, probabilistically, to a set of outcomes (life with no disease and no side effects, but also, possibly, life with a disabling disease, since no treatment is taken). Utilities of these outcomes and probabilities that they will happen are combined to yield a number—expected utility. One is supposed to gamble—to make a choice—in a way that maximises this expected utility. Makins takes this framework for granted and is focused on an additional complication, the patient’s risk preference. He believes that, in his hypothetical example, even if expected utility were exactly the same, withholding treatment …. (shrink)

Because it consists of an entire family of specific theories derived from the same first principles, rational choice offers one approach to generate explanations that provide for micro-macro links, and to attack a wide variety of empirical problems in macrosociology. The aims of this paper are (1) to provide a bare skeleton of all rational choice arguments; (2) to demonstrate their applicability to a range of macrosociological concerns by reviewing a sample of both new and classic (...) works; and (3) to discuss the weaknesses of current rational choice theory and the possibilities for its future development. (shrink)

Green and Shapiro's critique of rational choice theory underestimates the value of unification and the necessity of universalism in science. The central place of intentionality in social life makes both unification and universalism feasible norms in social science. However, ?universalism? in social science may be partial, in that the independence hypothesis?that the causal mechanism governing action is context independent?may hold only locally in certain classes of choice domains.

This paper focuses on Sen?s concept of contrapreferential choice. Sen has developed this concept in order to overcome weaknesses of the rational choice theory. According to rational choice theory a decision-maker can be always seen as someone who maximises utility, and each choice he makes as the one that brings to him the highest level of personal wellbeing. Sen argues that in some situations we chose alternatives that bring us lower level of (...) wellbeing than we could achieve if we had chosen some other alternative available to us. This happens when we base our decisions on moral principles, when we act out of duty. Sen calls such action a commitment-based action. When we act out of commitment we actually neglect our preferences and thus we make a contrapreferential choice, as Sen argues. This paper shows that, contrary to Sen, a commitment-based action can be explained within the framework of rational choice theory. However, when each choice we make can be explained within the framework of rational choice theory, when in everything we do maximisation principle can be loaded, then the variety of our motives and traits is lost, and the explanatory power of the rational choice theory is questionable. (shrink)

This paper addresses the explanatory role of the concept of a motive for action in economics. The aim of the paper is to show the difficulty economists have to accommodate the motive of commitment into their explanatory and predictive framework, i.e. rational choice theory. One difficulty is that the economists’ explanation becomes analytic when assuming preferences of commitment. Another difficulty is that it is highly doubtful whether commitment can be represented by current frameworks while (pre-)serving the ‘folk-psychological’ (...) idea of what is commonly understood by the idea of a commitment. Both difficulties lead to the conclusion that, although motives do matter, conceptualizing the motive of commitment would cause trouble for rational choice theory. (shrink)

Theories of rational choice are arguably the most prominent approaches to human behaviour in the social and behavioral sciences. At the same time, they have faced persistent criticism. In this paper, I revisit some of the core criticisms that have for a long time been levelled against them and discuss to what extent those criticisms are still effective, not only in light of recent advancements in the literature but also of the fact that there are different variants of (...) rational choice theories that have not been considered explicitly when criticizing them. (shrink)

Contemporary discussions of the positive relation between rational choice and moral theory are a special case of a much older tradition that seeks to show that mutual agreement upon certain moral rules works to the mutual advantage, or in the interests, of those who so agree. I make a few remarks about the history of discussions of the connection between morality and self-interest, after which I argue that the modern theory of rational choice can (...) be naturally understood as a continuation of this older tradition. I then go on to argue for a controversial three-fold thesis: (1) that grounding a theory of morality in terms of rational self-interest is the only epistemologically respectable way to proceed with the justification of moral principles; (2) that despite this, most of the contemporary explorations of rational choice foundations for moral principles do not work—that the models of rational choice to which they appeal yield less than the substantial results that they are intended to yield; but (3) that if one rethinks just what it means to be rational, one can find in fact a promising way to connect the two—specifically through the development of a theory of genuinely cooperative activity. (shrink)

In this chapter, it is described and assessed how political scientists use rational choice theories to offer causal explanations. We observe that the ways in which rational choice theories are considered to be successful in political science differs, depending on the explanandum in question. Political scientists use empirical variants of rational choice theories to explain the political behavior of individual agents and analytical variants to explain the behavior of collective actors. Both variants are used (...) for distinct explananda, which ask for different modes of explanation that raise in turn different explanatory demands toward rational choice theories. We argue that when political scientists discuss the explanatory usefulness of rational choice theories, they should assess them in light of the demands they are supposed to meet. This would enable a more nuanced and problem-oriented appraisal of rational choice theories in political science. (shrink)

Journal for the Theory of Social Behaviour, EarlyView.

In this paper, I argue for a new normative theory of rational choice under risk, namely expected comparative utility (ECU) theory. I first show that for any choice option, a, and for any state of the world, G, the measure of the choiceworthiness of a in G is the comparative utility (CU) of a in G—that is, the difference in utility, in G, between a and whichever alternative to a carries the greatest utility in G. (...) On the basis of this principle, I then argue that for any agent, S, faced with any decision under risk, S should rank his or her decision options (in terms of how choiceworthy they are) according to their comparative expected comparative utility (CECU) and should choose whichever option carries the greatest CECU. For any option, a, a’s CECU is the difference between its ECU and that of whichever alternative to a carries the greatest ECU, where a’s ECU is a probability‐weighted sum of a’s CUs across the various possible states of the world. I lastly demonstrate that in some ordinary decisions under risk, ECU theory delivers different verdicts from those of standard decision theory. (shrink)

I critically discuss a recent innovation in the debate surrounding the plausibility of rational choice theory : the appeal to evolutionary theory. Specifically, I assess Gigerenzer and colleagues’ claim that considerations based on natural selection show that, instead of making decisions in a RCT-like way, we rely on ‘simple heuristics’. As I try to make clearer here, though, Gigerenzer and colleagues’ arguments are unconvincing: we lack the needed information about our past to determine whether the premises (...) on which they are built are true—and, hence, we cannot tell whether they, in fact, speak against RCT. (shrink)

The increasingly wide spread use of RCM, rational choice modeling, and RCT, rational choice theory, in disciplines like economics, law, ethics, psychology, sociology, political science, management facilitates interdisciplinary exchange. This is a great achievement. Yet it nurtures the hope that a unified account of rational active choice making might arise from ‘reason’ in terms of intuitively appealing axioms. Such ‘rationalist’ characterizations of rational choice neglect real human practices and empirical accounts of (...) those practices. This is theoretically misleading and practically dangerous. Searching for a wide reflective equilibrium, WRE, on RCT in evidence-oriented ways can explicate ‘rational’ without rationalism. (shrink)

In this paper, I argue for a new normative theory of rational choice under risk, namely expected comparative utility (ECU) theory. I first show that for any choice option, a, and for any state of the world, G, the measure of the choiceworthiness of a in G is the comparative utility (CU) of a in G—that is, the difference in utility, in G, between a and whichever alternative to a carries the greatest utility in G. (...) On the basis of this principle, I then argue that for any agent, S, faced with any decision under risk, S should rank his or her decision options (in terms of how choiceworthy they are) according to their comparative expected comparative utility (CECU) and should choose whichever option carries the greatest CECU. For any option, a, a's CECU is the difference between its ECU and that of whichever alternative to a carries the greatest ECU, where a's ECU is a probability-weighted sum of a's CUs across the various possible states of the world. I lastly demonstrate that in some ordinary decisions under risk, ECU theory delivers different verdicts from those of standard decision theory. (shrink)

Habermas has argued that many of the endemic socio- economic problems of Western society are either symptoms or prod ucts of a 'lopsided' process of cultural rationalization, one that has emphasized instrumental forms of rationality over communicative. But other than presenting a rather general typology of lifeworld pathologies, Habermas has not done much to specify what these problems might be, nor has he provided any 'middle-range' analysis of the mechanisms through which they might be generated. This paper discusses some of (...) the ways in which, consistent with Haber mas's general framework, rational choice theory can be used for pre cisely this task. In this analysis, rational choice theory is not presented as a comprehensive theory of action, but is employed as a critical- diagnostic tool that allows the theorist to identify undesirable social interaction patterns that arise from a broader instrumentalization of the lifeworld. Key Words: critical theory • Habermas • instrumental rationality • market failure • rational choice theory. (shrink)