From a rational choice theory perspective, what are some examples of how exchange transactions (both economic and social) are regulated by the normative moral framework and legal framework of the...

From a rational choice theory perspective, what are some examples of how exchange transactions (both economic and social) are regulated by the normative moral framework and legal framework of the larger society and what are the conditions that explain whether individuals will comply with these normative and legal regulations or violate them?

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Karyth Cara | College Teacher | (Level 1) Senior Educator

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Rational Choice Theory

Rational choice theory holds that social and economic choices are made as if the individual has complete and adequate information and as if they have weighed the costs and benefits of all possible actions or choices in a field of alternate actions or choices and have chosen from amongst the possible alternates to achieve the best possible outcome. The starting point is always the individual and is subjective, and the aim is always the maximization of the individual's personal advantage.

Exchange Transactions

Exchange transactions are those in which the entity at each side of the transaction receives something of value while concurrently giving something of equal value. Non-exchange transactions shed light on exchange transactions because in non-exchange transactions, objects of value go only one direction: the receiver receives something of value while the giver receives nothing from the transaction. In exchange transactions both entities receive and sacrifice or give something of comparable value.

Normative Moral Framework and Legal Framework

Normative ethical relativism, producing normative moral frameworks, holds that, while moral values are relative to the social and cultural traditions, practices and convictions of a society (or of a group or an individual) where judgements of good, bad, right, wrong cannot be made, attempts at knowing how society ought to live must still be made. Normative ethics seeks to do this by defining and describing what actions and decisions possess what moral properties in order to construct a normative social moral framework of how to choose to live by accepting the beneficial and rejecting the detrimental or harmful. For a rational choice theorist, the beneficial would be synonymous with what maximizes personal advantage when considered from the standpoint of adequate available information, which would include social or legal punishments that would be weighed with other costs and benefits. Legal frameworks are constructed on the requirements imposed by laws that define and determine right and wrong choices and actions in regard to acceptable or punishable behaviors in society.

Exchange Transactions Regulated by Normative Moral Framework and Legal Framework

From the perspective of rational choice theory, exchange transactions are regulated by a normative moral framework in that, among all possible alternate choices, choices that go against the normative moral framework may be seen as not producing benefit in a cost-benefit analysis and as not resulting in maximization of personal advantage. Similarly, the legal framework has the potential to impose punishment, which few would see as a maximization of personal advantage.  

Conditions Conducive to Complying with or Violating Normative and Legal Regulation Frameworks

Since rational choice theory focuses on the individual and does not consider individuals interacting and relating together, group interactions, or social situations, conditions explaining whether the individual will comply with or violate regulations composing the moral and legal frameworks of society rest solely with the individual's assessment of costs and benefits of any course of action and with whether that course will maximize their personal advantage, with the underlying premise of full and adequate available relevant information from which to weigh costs and benefits. Since the focus of rational choice theory is solely on the individual and solely subjective, there can be no blind predictions made across society, especially since each individual is free to choose to go against a society's normative moral framework: while normative ethics does not assign moral value, it does not restrict objecting to a normative moral value as harmful or detrimental and rejecting it. The only predictive or explanatory conditions that can apply are the cost-benefit analysis, on an individual-per-individual basis, and the best overall outcome for each individual that will maximize their personal advantage, a highly subjective set of conditions.

Rational Choice Theory. Wikipedia.

Michael I. Ogu. "Rational Choice Theory." Arabian Journal of Business and Management Review, 2013.

John Scott. "Rational Choice Theory." Understanding Contemporary Society: Theories of The Present, edited by G. Browning.

Moral Relativism, Normative moral relativists. Wikipedia.

Normative Ethics. Wikipedia.

Normative Ethics. Moral Philosophy.

Moral Philosophy. Moral Philosophy.

Moral Relativism, Normative Relativism. Internet Encyclopedia of Philosophy.

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