Rational Choice

Rational choice, or rationality, has two meanings. First, in a technical sense, rationality implies that an individual's preferences over choices possess two properties: completeness and transitivity. The first property holds that the individual's preferences are well defined for any two possible alternatives in the set of available choices: Given any pair of alternatives x and y, the individual prefers choice x over y, prefers choice y over x, or is indifferent between them. The second property maintains that if the individual prefers alternative x to y and y to z, then the individual prefers x to z.

Most commonly, when scholars mention rational choice, they refer to the broad set of work—the rational choice school—that builds on this technical definition of rationality. Although derived, at the core, from this single technical definition of rationality, the rational choice school is commonly associated with a number of additional views about human behavior. Notably, rational choice is commonly associated with self-interested behavior. This association reflects a common set of assumptions about the structure of individuals' preferences, such as that people care only about their own personal welfare, not the welfare of others. This orientation leads many critics to juxtapose rational choice with theories in which individuals behave in other-regarding ways—for example, a Rousseauean citizen who strives for the common good. This, of course, puts aside the thorny issue of how to define or determine the “common good.”

Second, rational choice is closely associated with the idea of human interdependence and with a sub-field of economics known as game theory. Game theory provides a set of tools for studying the interactions among people. Crucially, game theory recognizes that one individual's choices often depend on the behavior of other individuals. For example, if an individual is stopped at a four-way stop sign, his or her decision of whether to wait or to proceed depends on whether he or she expects the other cars stopped at the intersection to wait or to proceed.