Rational Choice Theory

Rational choice theory (RCT), as it is called by sociologists, is common to the lexicon of many disciplines and is variously labeled by political scientists as “public choice,” by economics as “neoclassical economic theory,” and by psychologists as “expected utility theory.” Basic premises of RCT are derived from utilitarian philosophy as adopted by classical economic theory and institutionalized by game theory. The core of rational choice theory is that interactions of all social actors are basically economic transactions guided by self-interested choices among alternative known outcomes. Social actors are self-interested, goal oriented, and governed by individual knowledge and incentives. Actions are based on an established hierarchy of preferences (utilities) that promise to maximize individual benefits and reduce costs. Only actions that promise the highest net benefits relative to costs and achieve the actor's goals are enacted.