In other words, competition in the market encourages organizations to maximize profits so they can survive within the market. Unlike a more utilitarian approach to "maximizing utility," RTC works because it is more focused and secure in nature (Alchain, 1950)
It is sometimes referred to as rational action theory, often interpreted as ways to assume behaviors in microeconomic models as "wanting more" of something rather than less -- goods, services, overt political control, etc. (Allingham, 2002) It became even more popular as a usable theory within political science, sociology and philosophy after Gary Becker used it in describing studies of crime, discrimination and human capital and subsequently won the 1992 Nobel Memorial Prize in Economics (Nobel Prize, 1992)
In this, one might ask how much self-interest comes into the model. (Sears & Funk, 1990)Since this theory takes into consideration the thousands of unique variables present within a person running for office (body language, trust, media, message, and so much more), then it is neither a predictor nor an explanation of behavior, but a way to organize voter choice (Chong, 2009)
However, when one realizes that these systems are interacting continually to form decision-making logic, then we might find also differing sets of reality associated with each. Decisions, then, are not always the result of selfishness or need, but of something more primal (Evans, J
The model is not completely descriptive of reality, but instead helps understand reasoning and help in formulating falsifiable hypothesis, and judge those hypotheses using empirical tests. One famous example of this comes from Milton Friedman, who noted, if a theory that says the behavior of the leaves of a tree is explained by the rationality of the leaves and proven empirically, then under RCT it is a successful hypothesis (Friedman, 1970)
One scholar explained this using scissors: one blade is the limitations to knowing (cognition), the other the environment (external stimuli). The optimal combination of the two form a better decision in which resources may be exploited by using pre-existing structure and expected regularity within the environment in question (Gigerenzer, G
In effect, it is then a way of choices in patterns, rather than individual or unique choices. For example, there is nothing irrational about preferring dogs to cats as pets the first time, but there is something quite irrational about preferring dogs to cats and cats to dogs on a regular or even ad hoc, basis (Goode, 1997)
One might then ask what happens if it is impossible to empirically test or falsify the assumption of rationality? Does this mean the theory is true by definition, but not by example? Proponents of RCT say notk, that empirical tests may be conducted on some of the results in most cases. However, in order to glean a more accurate view of human decision-making, RCT must be expanded using other disciplines (psychology and anthropology, for instance) to expand the theories of markets by looking a micro (individual) behavior as morphing into maco (group) behavior (Kahneman, 2002)
Individuals then make appropriate-level decisions by comparing the costs and benefits to non-action or a different action. This then results in behaviors that move from the individual to society and therefore become reflective of culture (Lichbach, 2003)
This allows for a modeling approach that may help answer questions like voting behavior, campaign efficacy, bloc voting, and even why certain political votes are decided in a seemingly unpredictable manner. True, theories are only as good as the information given to them, but nevertheless, a paradigm to find a logical model and predictor of political behavior is extremely helpful in the complex age of the Internet and media markets (Lodge, M
In this, one might ask how much self-interest comes into the model. (Sears & Funk, 1990)Since this theory takes into consideration the thousands of unique variables present within a person running for office (body language, trust, media, message, and so much more), then it is neither a predictor nor an explanation of behavior, but a way to organize voter choice (Chong, 2009)
. individuals' actions and social actions are entirely concerned with their own welfare" (Abell, p
Rational Choice Theory Though formed primarily as an economic theory of behavior, the fact that rational choice theory necessarily depends on psychological factors means that it is broadly applicable throughout the human sciences. Studies of law and criminal justice as well as sociology have all employed the rational choice theory, and the theory has been studied from a variety of perspectives (Jacoby 2000; Huebsch 2010)
This leads to some degree of predictability in consumer behavior and provides a clear platform for the analysis of past economic actions and events; if people act rationally according to an assessment of the costs and benefits of each economic decision they make, then any situation can be analyzed based on their perception of costs and benefits. It is far from certain that rational choice theory is actually applicable in all or even many situations, however, and in fact there are a multitude of empirical studies and pieces of theoretical research that suggest several entirely different models of decision-making and economic behavior are more accurate in different scenarios (Miller et al
This calls into question of the dominant theories regarding consumer choice and economic behavior general: rational choice. Simply put, rational choice theory assumes that consumers and other economic actors think rationally about their decisions and make economic and spending decisions after assessing the costs and benefits as accurately as they are able to (Scott 2000; Huebsch 2010)