(e) From an overarching rational choice model resting on self-interest to its dissolution into one model of rational egoism and the other of morality, under the apparent influence of Adam Smith’s distinction between selfishness and moral sentiments, including sympathy (Lindenberg 1989). American Journal of Sociology 91, 1336-1355.
Cambridge: MIT Press. Also, the discussion suggests ways for analytically remedying such pathologies of rational choice theory that make the latter appear, like its neoclassical economic progenitor, “primitive” suffering from “ad hockery,” even “blind and foolish” (Akerlof 2002), “positively bizarre” (Margolis 1982), a “little bit silly” (Etzioni 1999), at best “one side of the coin” (Arrow 1990) or just “amusing” (Friedland and Robertson 1990). London: Routledge & Kegan Paul. Economists use the word marginal to mean “additional” or “extra,” and they use the term marginal analysis to describe how people make choices by comparing the benefits and costs of doing a bit more or a bit less. Admittedly, the basic behavioral axiomatics of rational choice theory is that of individuals as selfish, goal-oriented, and maximizers (Boudon 1998:821). New York: Springer. View all posts by Seb Carpanini. Alternatively, general non-rational theories rest on an overall model and principle of non-rationality. Nevertheless, rational choice theory typically links egoism with rational behavior, and altruism with non-rational behavior. In particular, these risks of tautology are generated by the sub-summation of all human ends and values, hard and soft (Opp 1989), intrinsic and extrinsic, under an all-encompassing mono-utility (Etzioni 1999) utility function. Thus understood, a mixed conception as the strategy for explanatory theory construction can be defended and preferred on these grounds: (a) promoting theoretical pluralism rather than monism; (b) providing realistic explanation as opposed to implausible simplifications, e.g. This is a curious path from an overarching principle of homo economicus assumed to be universally valid to its splitting into one for actors making private rational choices and the other for agents, following internalized social rules, instead.

Papers in honor of Peter M. Blau (pp. London: Routledge. Hence, it seems to some economists that “neither neoclassical nor behavioural economics can provide a complete account of the bases of habits or rules’ (Hodgson 1997:663). The Attainment Of Solidarity In Intentional Communities. When they turn to economists, however, they can get a wide variety of advise. What Is Rational Emotive Behavior Therapy (REBT)? In this view, defining rationality by strong reasons, albeit admittedly tautological, represents the “only way of getting rid of the discussions as to “what rationality really means”” (Boudon 1998:823). There simply aren’t enough resources to satisfy all needs and wants. Arrow, K. (1994). One can argue (as a referee commented) that while measuring psychic-income concepts like happiness is not as clear as the measurement of purely economic utility, they also can be measured. Sociological Theory 18, 518-523.

First, general rational theories are usually based on a single model and principle of rational behavior. In C. Calhoun, M. Meyer & R. Scott (Eds. These arguments can be11 strengthened by stressing the important difference between formal or functional and substantive or social rationality, as made by Mannheim in his Ideology and Utopia and by Weber in (Economy and Society) before.

Alternatively, the question can be rephrased to the effect of whether theories of non-rational behavior can also represent a unified and perhaps more adequate model of social action than their rational counterparts. Coleman, J. And this applies not only to the cardinal measurement of utility mostly abandoned even in mainstream economics, except perhaps game theory, but also to the ordinal, as there is no way to determine that a social agent’s utility or happiness is higher, no matter how much in numerals, than that of the other. Indeed a 53-69). http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1978/press.html, The Function of Prices: Three Aspects of the Theory of Economic Equilibrium, Council for the Lindau Nobel Laureate Meetings/Foundation Lindau Nobel Laureate Meetings, The Concept of Human Rationality in Economics and Psychology, http://www.nobelprize.org/nobel_prizes/economic-sciences/. Wintrobe, R. (1997). A procedural rational person, according to Herbert Simon, is not maximizing anything, but trying to reach a satisfactory level of achievement, using incomplete information and limited computational capabilities. How evolution shaped the human mind to only sometimes be logical. The Rational Choice Perspective: A Theoretical Assessment. In economics, maximising utility is referred to in a quantitative sense, where there is an objectively best outcome. a “non-Euclidean geometry.”. (1976), where he expresses the belief that “a person decides to marry when the utility expected from marriage exceeds that expected from remaining single.” Becker believes that emotion and sentimentality prevent a logical and rational approach in coming to a decision.

Rationality and Society 1, 173-196. Emotions and economic theory. In short, rational behavior as perceived or experienced by the actor is not necessarily what is observed or attributed by the other actors, and vice versa (Boudon 1982; Simon 1982). Machlup, F. (1963). 139-163). By assumption, for rational choice theory, like neoclassical economics, all “human action is necessarily rational [in the sense of Weberian instrumental rationality]” (Mises 1966:19). (1991). Economists aren’t so quick to judge. ), Philosophy of the Social Sciences (pp. We’re No Angels: Realism, Rational Choice, and Rationality in Social Science. In passing, the above preference for thick rational choice conceptions also implies a curious or partial interpretation of thick-thin rational choice theories on the basis of whether these engage either in an explicit a priori specification of human ends or practice agnosticism or muteness in this regard. that they satisfy the transitive property in logic. Should you study economics for another hour? The conception of rational action does not prejudge or prescribe the underlying teleology, namely the character of the purposes or goals pursued. In a similar vein as the preceding, the outcome is some paradoxical—from the stance of the initial model--combination of homo economicus and homo sociologicus (Boudon 1981). Journal of Economic Literature 38, 595-613. Thereby, theoretical pluralism is preferred over monism, given the complexity and multiplicity of the real world (Arrow 1997:765). You might want to see it right away, when it is only showing in the theater. They believe that, when making choices, people try to avoid costs and maximize benefits to themselves.This is what economists mean by rational decision-making. (1993).

– Michael Foucault. 159-180). (1994). Seb's interest in economics has expanded to fields of management and strategy. homo moralis, homo religiousus, homo politicus, homo honoris, etc. London: St. Martin’s Press. Cambridge: Cambridge University Press.

As egoist’s utility or money income seems of a qualitative different kind that of the altruist or psychic income, it is highly questionable to subsume under the same category, i.e., utility optimization, even satisficing, what are essentially different types of behavior, such as egoism and altruism, status and wealth, political power and profit, and the like. But, as human nature is present in all human decisions, rationality may be highly subjective, therefore the notion of rationality as described in economics may not be entirely rational itself.
For example, spending wealth on gaining social prestige or political power to the point of becoming economically broke, as do some of those businessmen seeking political offices at any financial cost in the USA, does not seem to generate the same kind of utility as using that wealth to make money profit, by investing it, say, in Wall-Street. By considering emotion and sentiment within rationality, the notion of rationality is made much more subjective. Mises, Hayek, and Robbins), and thus shares well-known negative or positive arguments of tautology and empirical futility, e.g. Intrinsic Motivation and Extrinsic Incentives. On this account, applying the parsimony rule would lead to clearly inadequate model selection and other paradoxical results. Slote, M. (1989). Rational choice theory, also known as theory of rational choice, choice theory or rational action theory, is a framework for understanding and often formally modeling social and economic behavior. 1982;2:478–505. Sociological Theory 17, 146-170. Now we segue into introducing some specific features of economic thinking: economic rationality, marginal analysis, and positive vs. normative reasoning.

The latter are at least consistent and with a definite domain. both rational and non-rational. At this juncture, Mannheim in his “diagnosis of our time” detects some degree of contradiction between functional and substantive rationality in capitalist society. In this regard, a reviewer made the following comment: “I have seen rational choice models where the actors were so constrained by assumptions that the outcome, while completely unrealistic, was determined before the model was run.”. American Sociological Review 55, 339-345. However, the question arises as to whether rational choice is really the only or at least the best unified model or general theory of social action. This prediction is based on an oversimplification, and it might not hold true in every case—individual businesses would obviously need to understand the full cost of moving certain work out of the country before doing so. Alexander, J. In methodological terms, since such endeavors involve ad- or post- hoc theory development (Conlisk 1996), they run the risk of ad-hockery or/and tautology, as various ad-hoc hypotheses are advanced when the initial premise of optimization fails (Baxter 1993). The more particular instances of this curious trajectory are noted below. One group includes unified models of value-laden behavior.

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