Rational Choice

Question 1

RCT Origins (and Types)

Answer 1

Emerged in the 1960s in the US, blending economics and political science.

Types: Rational actor theory (individual), Public choice theory (governments), Social choice theory (aggregating individuals).

Content-based assumption on human behavior, rational and self-interested.

Question 2

Situating Rational Choice Theory:

Answer 2

Shares features with behavioralism: positivism epistemology, foundationalist ontology, and privileging quantitative methodology.

Question 3

Core Characteristics:

Answer 3

Foundationalist ontology (objectivist view of being).
Positivist epistemology (scientific knowledge).
Privileges quantitative methodology.
Deductive approach, starting with theory.

Question 4

Theoretical Models:

Answer 4

Aims for accurate prediction of aggregate behavior, not detailed decision reconstruction.
Based on idealization, focusing on macro-level behavior

Question 5

Early RCT - Adam Smith’s Invisible Hand:

Answer 5

Reference to the invisible hand in “Wealth of Nations” (1776).
Behavior organized by self-interest at the macro level.

Question 6

RCT Assumptions in Non-Economic Settings:

Answer 6

Applies rational choice assumptions to non-economic settings.
Example: Purpose of colleges and universities.

Question 7

Methodological Individualism:

Answer 7

Shared assumptions with behavioralism.
Behavior is predictable based on individual interests, preferences, and actions.
Unitary actor assumption: Applicable logic to collective units.

Question 8

RCT and the Simple Question:

Answer 8

Answers the “Why do people behave the way they do?” question with homo economicus assumptions.

Question 9

Assumptions: Rationality & Self-interest:

Answer 9

People act to secure goals reflecting their self-interest.
Instrumental rationality: Identifying actions to achieve goals through cost-benefit analysis.
Groups have fixed, self-interested goals pursued rationally.

Question 10

What does RCT assume for Interests and Preferences

Answer 10

Assumed to be complete, stable, and transitive.
Stable and fixed preferences are integral to RCT.

Question 11

Unitary Actor Assumption

Answer 11

Logic of collective action: Rational individuals form rational groups.

Group members contribute to a common goal if everyone agrees it’s worthwhile.

Question 12

Logic of Collective Action:

Answer 12

Individual rationality can lead to collective suboptimality.
Political questions arise about government manipulation of behaviors.

Question 13

Game Theory - The Prisoners’ Dilemma:

Answer 13

Illustrates rational choice with a Nash equilibrium vs. Pareto optimal outcome.
Nash equilibrium often not collectively rational.

Question 14

Solutions to Collective Action Problems

Answer 14

Rational choice perspective suggests changing incentives (via rewards, sanctions or nudges), government regulation.

Answers outside the perspective include socialization and norms.

Question 15

Olsen’s Logic of Collective Action (1965):

Answer 15

Olsen challenges the assumption that group members contribute to a collective goal.
Distinguishes privileged, intermediate, and latent groups with varying contributions.

Question 16

Criticisms of RC: Rationality:

Answer 16

Flawed rationality assumption due to imperfect information, cognitive limitations, and time constraints.
RC response: Bounded rationality, where individuals satisfice rather than maximize.

Question 17

Criticisms of RC: Self-Interest:

Answer 17

Focuses on self-interests challenges other possible motives: altruism, spite, and expressive motives.
RC response: Other-regarding preferences can be explained in terms of individual benefit.

Question 18

Criticisms of RC: Agency:

Answer 18

Not all individuals make the same choices even with similar conditions.
Influenced by structures, institutions, ideals, ideology.
RC response: Models focus on macro-effects, not individual-level accuracy.

Question 19

Criticisms of RC: Equilibrium

Answer 19

Explains stability, not change over time.

Political scientists often interested in causes of change, not what explains the status quo

Question 20

Criticisms of RC: Neoliberal Ideology:

Answer 20

Supports competitive markets, consumer approach to public goods, and government manipulation through incentives.

Question 21

Olsen: Logic of Collective Action, the privileged group

Answer 21

Definition: Group where at least one member values the common good enough to bear the entire cost.

Characteristics:
One member’s contribution leads to Pareto optimality.
Free riding is possible.
Individual cost/benefit calculations may differ.
Privileged groups do not face collective action problems.

Question 22

Olsen: Logic of Collective Action, the intermediate group

Answer 22

Definition: Group where individual actions have a perceptible effect on others.

Characteristics:
Allows for monitoring.
Coordination is possible to solve collective action problems.
Selective incentives (rewards/punishments) tied to individual contributions.
Intermediate groups can still suffer collective action problems if contributions are not enforced.

Question 23

Olsen: Logic of Collective Action, the latent group

Answer 23

Definition: Group where the effect of individual action is not easily observable.

Characteristics:
Actions are not easily perceptible.
Selective incentives (rewards/punishments) needed.
Requires an external enforcer (government/institution) with power.
Latent groups commonly face widespread collective action problems.