Essay On Rational Choice Theory

“Make a rational choice,” how many times have you used this phrase or heard other people use it? Numerous times right? Whenever we are receiving or giving advice, we try to focus on the rationale. So what is a rational choice? According to a traditional model of rational choice theory, a choice is considered rational if it is expected to maximize utility. Usually, any choice that tends to increase the level of satisfaction is considered to be rational. To have a better understanding of the rational choice theory, in this paper, I would like to discuss some of the assumption of the theory, presuppositions regarding the theory as well as some of views on the theory.

The rational choice theory is one of the most basic theories, and is the foundation of more complex theories. Due to …show more content…
First assumption of the theory is that, one’s preferences are stable, well-defined, each of them to have a numerical value assigned to them and they should be independent of other’s influences. Second assumption is that, a person has perfect knowledge of all the available options and the opportunity cost of choosing an option. Third assumption of the theory is, that everyone has the ability to maximize utility of each option. And the last assumption is an individual has the ability to make perfect logical inferences. All of these assumptions together set base for the rational choice theory.

For any theory to be considered valid, it needs certain presuppositions to deem its validity. In case of the rational choice theory, one of the presuppositions is that, an inferential system that is based on a set of logical and statistical truths or laws leads to valid rules of inference that are considered to be reliable. Hence, these rules lead to inferences or conclusions that are trustworthy and accurate. This suggests that, such an inferential system would lead people to make rational