Rational Choice Theory Case Study

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In 1992, the Canadian Newfoundland Cod fishery collapsed which resulted in up to 40,000 people being put out of work. The area was once known for its highly populated waters but was soon devastated by overfishing by both the community and fishing industries. Economists have tried to theory in particular was more significant than the rest. The rational choice theory may provide an answer as to why the disaster ensued. The rational choice theory is a key aspect of social sciences and it is viewed as a mode of reasoning. This particular theory provides an analysis of rational decision making based on an individual’s goals, beliefs and preferences. It assumes that individuals make rational decisions that provide them with the greatest benefit …show more content…
This allows fishermen to catch the cod fish without any limits or barriers and in general, gives them the incentive to maximise their self –interests. This contributed to the collapse of the fishery, fore it was difficult to stop or slow down the rate of fishing in the waters. The collapse of the fishery may be seen as a sufficient condition. This meant that with the presence of overfishing, the occurrence of the collapse of the fishery is guaranteed. Fish is generally seen as a renewable resource because the fish can reproduce to regenerate the fish population. However, in the case of the Canadian fishery, the fish can be seen as being as being scarce because overfishing. The demand of the cod fish is much higher than the supply which contributes to the collapse of the fishery. Some economists agree with the idea that individuals are self-interested and the goal of the individuals is to maximise his or her private interests. This construct is known as homo-economicus and it is a preconception about the nature of the goals of individuals. Overall, the rational choice theory suggests that the collapse of the fishery ensued by overfishing as a result of fisherman pursuing their own goals and …show more content…
What is good for each individual at any given point should only be decided based on his or her interests. Primarily, what this statement means is that the fishermen that are fishing in the newfound land fishery should be allowed to fish there as much as they want if it is of their best interest. I disagree with this statement because fisherman will only gain in the short term by pursuing their interests or desire without considering the consequence of the future. The long term loss is that the number of fish in the Canadian fishery is diminishing as a result of overfishing by large foreign trawlers and local fishermen. A significant factor that was not present prior to the collapse was communication. If fishermen were to communicate effectively with each other, the collapse could have been avoided. For example, if the governor or higher authority of the region were to set a quota or limit on how much fish the fishermen can catch, the volume of fish in the fishery would not diminish as fast. In general, what this means is that fishermen should not aim to fulfil their wants by fishing as much as they want, they should communicate with each other to come up with a system as to how much fish they can catch, this way they can preserve the amount of fish in the waters for the long run. According to the article on greenpeace.org, Canada increased its fishing limits. ‘In a desperate attempt to increase

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