Sociological Theory: Rational Choice Theory
Rational choice theory tries to explain why people make decisions or take actions that have particular outcomes, how they do so and to predict the decisions they will make given certain circumstances. Rational choice theory is not unique to sociology; in fact it has its intellectual roots in classical economics and political theory. But its application by sociologists is unique, because of the way sociologists use rational choice theory to not only explain the calculations of costs and benefits people make before they act, but also how these calculations are made in the context of social interactions and how they contribute to a stable social order. The concepts and terms of rational choice theory have developed into what is known as exchange theory. Rational choice theory is used by criminologists to explain why would-be offenders make decisions to engage in activities that have potentially criminal outcomes and by medical sociologists to explain why people make certain health related choices and not others. However, rational choice theory has been criticized because first, it generally ignores the social determinants of decisions, choices and actions; second, it over-rationalizes human thought and action; and third, rational choice theory may be a product of modernity insofar as it privileges an individualized approach to explaining decision-making and action.
Keywords Cost-benefit; Individualism; Rational Action; Rationality; Rationalization; Social Exchange Theory; Social Interaction; Social Order
Rational Choice Theory
Rational choice theory tries to explain why people make decisions with particular outcomes (or take actions); how they do so; and to predict the decisions they will make given certain circumstances. Rational choice theory is not unique to sociology and in fact has its intellectual roots in classical economics and political theory. But its application by sociologists is unique, because of the way the sociologists use rational choice theory to not only explain the calculations of costs and benefits people make before they act, but also how these calculations are made in the context of social interactions and how they contribute to a stable social order. The concepts and terms of rational choice theory have developed into what is known as exchange theory. Rational choice theory is used by criminologists to explain why would-be offenders make decisions to engage in activities that have potentially criminal outcomes; and by medical sociologists to explain why people make certain health related choices and not others. However, rational choice theory has been criticized because,
• It generally ignores the social determinants of decisions, choices and actions;
• It over-rationalizes human thought and action; and
• Rational choice theory may be a product of modernity insofar as it privileges an individualized approach to explaining decision-making and action.
Rational choice theory seeks to explain human behavior in terms of the decisions that people make in order to maximize their aims, on the assumption that people make calculated decisions about their lives (about money, relationships or actions) based on a given set of constraints or feasible options.
Basis in Economics
The Rational Choice model developed from economic understandings of how prices and the allocation of scarce resources can be explained by the way people rationally maximize utility in relation to cost. Akers (2000) notes that rational choice theory borrows the "expected utility principle" from economics, which states that people will order their behavior according to rational decisions based on straightforward cost-benefit analyses. In sociology, rational choice theory tends to be referred to as exchange theory and refers to a body of theory that attempts to explain aspects of social life by the calculated actions of individuals, even those most unlikely to be responsive to calculative action, such as intimate relationships. Over time, rational choice theory has been linked to or integrated with other sociological traditions, notably within the action frame of reference, network theory, and organization theory (Levi, Cook, O'Brien & Faye, 1990).
The best known example of rational choice theory is Adam Smith's theory of the division of labor from the introduction to the Wealth of Nations (1776), in which the outcome of a free market is that self-interested individuals are wise enough to promote the public good. That is, people make choices in their (economic) self-interest that will have the effect of promoting the public good. The key to understanding rational choice theory then, is the assumption that when people make decisions, and act on those decisions, they do so in their own self-interest. That does not necessarily mean that people are selfish, but they that they rationally calculate the best possible course of action in terms of what it will cost them and the rewards they will reap. In political sociology, rational choice theory tends to be applied to voting behavior, political commitment, and collective organization (voluntary and coerced). Similarly in criminology, rational choice theory is typically applied to cost-benefit calculations that would-be offenders make; in medical sociology, rational choice theory has been used to explain why people make certain health choices.
Also key to understanding rational choice theory is the emphasis on rational action and rationality, characteristics of modernity. For Max Weber, for example, modern Western capitalism is rational. Moreover, rationality is the key characteristic of the age and pervades all aspects of social life. Rationality is most apparent in bureaucratic forms of organization, in which "rules, means, ends, and matter-of-factness dominate its bearing" (Gerth & Mills, 1991, p. 235).
Yet, rationality for Weber is not just about economic market conditions but also is an attitude or sensibility associated with a particular kind of decision-making. Indeed, rationality so pervades social and economic life in ways that are difficult to avoid or challenge: it becomes an "iron cage." Moreover, rationalization marks the progression of modern industrial societies for Weber, as does rational goal-oriented action. Thus, for Weber, it isn't only the behavior of individuals that can be explained by rational choice theory but also the development and characteristics of modern capitalist society.
As such, rational choice theory has developed as a model of human behavior that assumes people are motivated by money and the possibility of making a profit (Scott, 2000). However, although Weber and other theorists acknowledge that many forms of human action and behavior are possible such as value-oriented action (Max Weber), habitual action (such as in the work of Pierre Bourdieu), and emotional action (as in the work of Arlie Hochschild), rational choice theory is unique in that it privileges calculation, rationality, and instrumentalism, even when action may seem irrational (Scott, 2000).
While political economy assumes that money is the primary motivator for most people and that the choices they make are motivated by maximizing the potential for accruing money, sociology recognizes, first, that other kinds of rewards may motivate people and second, that rational calculations are made through social interaction. Thus, though decisions and actions may be rationally calculated to maximize benefits, such decisions and actions require a degree of reciprocity, or social exchange.
Moreover, though the rewards that people seek may be material, they are as or more likely to be social. Sociologists have found that resources such as time, prestige, and approval are social rewards that motivate people to act in particular ways. In particular, through social interaction, people reinforce or undermine certain behaviors through an exchange of rewards and sanctions and in this way, sustain social order.
George Homans, a contemporary of Talcott Parsons at Harvard University, developed a sociological model of rational choice theory based on a fusion of B. F. Skinner's behavioral psychology with Homans's own adaptation of economics (see Waters, 1994 for an extended discussion of Homans). Homans's framework privileged social interaction as the framework through which choices are made and emphasized the importance of the mutually interactive performances of individuals (when I act, my performance will be directly rewarded or punished by another). Thus, for Homans, winning social approval was critical to understanding why people made certain decisions.
He argued that social interaction produces benefits and costs (e.g. goods, money, praise, approval, esteem) and people will act rationally to obtain them. When individuals act (make choices), they calculate the cost to them in material and emotional terms of providing benefits for others. They also calculate the profits from the benefits they receive. In making so-called rational choices, people don't want to feel they are disadvantaged or that their actions will incur disapproval. In other words, they look for an element of distributive justice as an outcome of their rational choice (Waters, 1994).
In sum, the benefits received by an individual depend on the benefits the individual provides to others. There is a process of exchange between individuals in which benefits are traded on the basis of the information that people have...
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