Rational choice model

This article is about a theory of economics. For rational choice theory as applied to criminology, see Rational choice theory (criminology). For rational choice theory as applied to international relations, see Rationalism (international relations).
Part of a series on
Economics
Branches and classifications
Concepts, theory and techniques
By application
Notable economists
Lists

The rational choice model, also called rational choice theory refers to a set of guidelines that help understand economic and social behaviour.[1] The theory originated in the eighteenth century and can be traced back to the political economist and philosopher Adam Smith.[2] The theory postulates that an individual will perform a cost–benefit analysis to determine whether an option is right for them.[3] Rational choice theory looks at three concepts: rational actors, self interest and the invisible hand.[4]

Rationality can be used as an assumption for the behaviour of individuals in a wide range of contexts outside of economics. It is also used in political science,[5] sociology,[6] and philosophy.[7]

  1. ^ Lawrence E. Blume and David Easley (2008). "[Rationality]," The New Palgrave Dictionary of Economics, 2nd Edition. http://www.dictionaryofeconomics.com/article?id=pde2008_R000277&q Abstract." by Abstract & pre-publication copy.
       Amartya Sen (2008). "Rational Behaviour," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
  2. ^ Boudon, Raymond (August 2003). "Beyond Rational Choice Theory". Annual Review of Sociology. 29 (1): 1–21. doi:10.1146/annurev.soc.29.010202.100213. ISSN 0360-0572.
  3. ^ Gary Browning, Abigail Halcli, Frank Webster (2000). Understanding Contemporary Society: Theories of the Present, London: SAGE Publications.
  4. ^ Levin, J. and Milgrom, P., 2004. Introduction to choice theory. Available from internet: http://web. stanford. edu/~ jdlevin/Econ, 20202
  5. ^ Susanne Lohmann (2008). "Rational Choice and Political Science," The New Palgrave Dictionary of Economics, 2nd Edition.Abstract.
  6. ^ Peter Hedström and Charlotta Stern (2008). "Rational Choice and Sociology," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
  7. ^ Taliaferro, Charles (2013). "Rationality (Philosophical)". Encyclopedia of Sciences and Religions. Springer Netherlands. pp. 1947–1950. doi:10.1007/978-1-4020-8265-8_1549. ISBN 978-1-4020-8264-1. Retrieved 9 January 2024. {{cite book}}: |website= ignored (help)