User:Elioraecon3430/Rational choice theory

Rational Choice theory in Social Interactions

Rational Choice Theory and Social exchange theory involves looking at all social relations in the form of costs and rewards, both tangible and non-tangible.

According to Abell, Rational Choice Theory is "understanding individual actors... as acting, or more likely interacting, in a manner such that they can be deemed to be doing the best they can for themselves, given their objectives, resources, circumstances, as they seem them". [1] Rational Choice Theory has been used to comprehend the complex social phenomena, of which derives from the actions and motivations of an individual. Individuals are often highly motivated by the wants and needs. According to exchange theorists, Professional and personal friendships are begin and end as It is guided by the rational calculation of an exchange of rewards and costs.

By making calculative decisions, it is considered as rational action. Individuals are often making calculative decisions in social situations by weighing out the pros and cons of an action taken towards a person. The decision to act on a rational decision is also dependent on the unforeseen benefits of the friendship. Homan mentions that actions of humans are motivated by punishment or rewards. This reinforcement through punishments or rewards determines the course of action taken by a person in a social situation as well. Individuals are motivated by mutual reinforcement and are also fundamentally motivated by the approval of others.[2] Attaining the approval of others has been a generalized character, along with money, as a means of exchange in both Social and Economic exchanges. In Economic exchanges, it involves the exchange of goods or services. In Social exchange, it is the exchange of approval and certain other valued behaviors.

Rational Choice Theory in this instance, heavily emphasizes the individual's interest as a starting point for making social decisions. Despite differing view points about Rational choice theory, it all comes down to the individual as a basic unit of theory. Even though sharing, cooperation and cultural norms emerge, it all stems from an individual's initial concern about the self.[3]

Social Exchange and Rational Choice Theory both comes down to an individual's efforts to meet their own personal needs and interests through the choices they make. Even though some may be done sincerely for the welfare of others at that point of time, both theories point to the benefits received in return. These returns may be received immediately or in the future, be it tangible or not.

Coleman discussed a number of theories to elaborate on the premises and promises of rational choice theory. One of the concepts that He introduced was Trust. It is where "individuals place trust, in both judgement and performance of others, based on rational considerations of what is best, given the alternatives they confront"[4].

In a social situation, there has to be a level of trust among the individuals. He noted that this level of trust is a consideration that an individual takes into concern before deciding on a rational action towards another individual.

It affects the social situation as one navigates the risks and benefits of an action. By assessing the possible outcomes or alternatives to an action for another individual, the person is making a calculated decision. In another situation such as making a bet, you are calculating the possible lost and how much can be won. If the chances of winning exceeds the cost of losing, the rational decision would be to place the bet. Therefore, the decision to place trust in another individual involves the same rational calculations that are involved in the decision of making a bet.

Even though rational theory is used in Economics and Social settings, there are some similarities and differences. The concept of reward and reinforcement is parallel to each other while the concept of cost is also parallel to the concept of punishment. However, there is a difference of underlying assumptions in both contexts. In social a social setting, the focus is often on the current or past reinforcements instead of the future although there is no guarantee of immediate tangible or intangible returns from another individual. In Economics, decisions are made with heavier emphasis on future rewards.

Despite having both perspectives differ in focus, they primarily reflect on how individuals make different rational decisions when given an immediate or long-term circumstances to consider in their rational decision making.

Criticism

This theory critically helps us to understand the choices an individual or society makes. Even though some decisions are not entirely rational, it is possible that Rational Choice Theory still helps us to understand the motivations behind it. Moreover, there has been a lot of discourse about Rational Choice Theory. It has often been too individualistic, minimalistic and heavily focused on rational decisions in social actions. Sociologists tend to justify any human action as rational as individuals are solely motivated by the pursuit of self-interest. It also does not consider the possibility of pure altruism of a social exchange between individuals.