Rational Choice Theory: Toward a Psychological, Social, and Material Contextualization of Human Choice Behavior
2016 (English)In: Theoretical Economics Letters, ISSN 2162-2078, E-ISSN 2162-2086, Vol. 6, no 2, 195-207 p.Article in journal (Refereed) Published
The main purpose of this paper is to provide a brief overview of the rational choice approach, followed by an identification of several of the major criticisms of RCT and its conceptual and empirical limitations. It goes on to present a few key initiatives to develop alternative, more realistic approaches which transcend some of the limitations of Rational Choice Theory (RCT). Finally, the article presents a few concluding reflections and a table comparing similarities and differences between the mainstream RCT and some of the initial components of an emerging choice theory. Our method has been to conduct a brief selective review of rational choice theoretical formulations and applications as well as a review of diverse critical literature in the social sciences where rational choice has been systematically criticized. We have focused on a number of leading contributors (among others, several Nobel Prize Recipients in economics, who have addressed rational choice issues). So this article makes no claim for completeness. The review maps a few key concepts and assumptions underpinning the conceptual model and empirical applications of RCT. It reviews also a range of critical arguments and evidence of limitations. It identifies selected emerging concepts and theoretical revisions and adaptations to choice theory and what they entail. The results obtained, based on our literature reviews and analyses, are the identification of several major limitations of RCT as well as selected modifications and adaptations of choice theory which overcome or promise to overcome some of the RCT limitations. Thus, the article with Table 1 in hand provides a point of departure for follow-up systematic reviews and more precise questions for future theory development. The criticisms and adaptations of RCT have contributed to greater realism, empirical relevance, and increased moral considerations. The developments entail, among other things: the now well-known cognitive limitations (“bounded rationality”) and, for instance, the role of satisficing rather than maximizing in decision-making to deal with cognitive complexity and the uncertainties of multiple values; choice situations are re-contextualized with psychology, sociology, economic, and material conditions and factors which are taken into account explicitly and insightfully in empirical and theoretical work. Part of the contextualization concerns the place of multiple values, role and norm contradictions, and moral dilemmas in much choice behavior. In conclusion, the article suggests that the adaptations and modifications made in choice theory have led to substantial fragmentation of choice theory and as of yet no integrated approach has appeared to simply displace RCT.
Place, publisher, year, edition, pages
Uppsala, 2016. Vol. 6, no 2, 195-207 p.
IdentifiersURN: urn:nbn:se:uu:diva-294006DOI: 10.4236/tel.2016.62022OAI: oai:DiVA.org:uu-294006DiVA: diva2:928490