Does rational choice theory assume people are always rational?

Strictly, it is less a claim that people always behave rationally than a modeling strategy: assuming they do often explains group-level outcomes well. Behavioral economics studies the situations in which the assumption fails.

What is the paradox of voting?

Because a single vote has a tiny chance of changing an election while voting costs time and effort, a purely self-interested calculation suggests not voting, yet many people vote.

Rational Choice Theory

👥 Sociology By CampusDown Wiki Editorial Team Last updated October 26, 2026

Rational choice theory is a social-science approach that assumes individuals have consistent preferences and choose the action with the highest expected payoff under constraints, and explains political and social phenomena as the aggregate of such choices.

Contents

1. Core assumptions and origins
2. Spread across the social sciences
3. Critiques and revisions
4. FAQ
5. References

Core assumptions and origins

Rational choice theory starts from methodological individualism, explaining social phenomena as outcomes of individual action. It rests on three assumptions: individuals have preferences they can rank consistently, they face constraints such as income, time and information, and within those constraints they choose the alternative with the highest expected utility. Von Neumann and Morgenstern's (1944) expected utility theory and game theory supplied the mathematical foundations. In sociology George Homans's (1958) exchange theory, which treated social behavior as an exchange of rewards and costs, was an early form. "Rational" here is instrumental: it does not mean goals are good, only that means are chosen consistently given goals.

Anthony Downs (1957) modeled voters and parties as utility maximizers, concluding that party platforms converge toward the median voter and raising the "paradox of voting": why vote when one ballot almost never changes the result? In The Logic of Collective Action (1965) Mancur Olson showed that free riding makes action for common interests harder in larger groups, bringing problems like the tragedy of the commons and the prisoner's dilemma into political science. Gary Becker (1976) analyzed marriage, fertility, crime and discrimination as economic choices. James Coleman's Foundations of Social Theory (1990) systematized micro–macro links from individual action to social structure, and Breen and Goldthorpe (1997) explained educational inequality through class differences in educational choices.

Critiques and revisions

Herbert Simon (1955) proposed bounded rationality: limits on information and computation lead people to choose options that are good enough rather than optimal. Kahneman and Tversky's (1979) prospect theory and research on the framing effect showed that preference consistency breaks down systematically, for example when the same options are described differently. Green and Shapiro (1994) charged that rational choice work in political science builds post hoc explanations that fit the theory and offers weak empirical tests. Sociologists in the functionalist and conflict traditions objected that it neglects norms, identity, emotion and structural constraint. Elster (1989) and Hechter and Kanazawa (1997), among others, responded with a "sociological rational choice theory" that relaxes rationality assumptions and incorporates social context.

FAQ

Does rational choice theory assume people are always rational?: Strictly, it is less a claim that people always behave rationally than a modeling strategy: assuming they do often explains group-level outcomes well. Behavioral economics studies the situations in which the assumption fails.
What is the paradox of voting?: Because a single vote has a tiny chance of changing an election while voting costs time and effort, a purely self-interested calculation suggests not voting, yet many people vote.

Sources reviewed: 2026-10-26

References

von Neumann, J., & Morgenstern, O. (1944). Theory of Games and Economic Behavior. Princeton, NJ: Princeton University Press.
Downs, A. (1957). An Economic Theory of Democracy. New York: Harper & Row.
Olson, M. (1965). The Logic of Collective Action. Cambridge, MA: Harvard University Press.
Homans, G. C. (1958). Social behavior as exchange. American Journal of Sociology, 63(6), 597–606.
Becker, G. S. (1976). The Economic Approach to Human Behavior. Chicago: University of Chicago Press.
Simon, H. A. (1955). A behavioral model of rational choice. Quarterly Journal of Economics, 69(1), 99–118.
Coleman, J. S. (1990). Foundations of Social Theory. Cambridge, MA: Harvard University Press.
Elster, J. (1989). Nuts and Bolts for the Social Sciences. Cambridge: Cambridge University Press.
Green, D. P., & Shapiro, I. (1994). Pathologies of Rational Choice Theory. New Haven, CT: Yale University Press.
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291.
Hechter, M., & Kanazawa, S. (1997). Sociological rational choice theory. Annual Review of Sociology, 23, 191–214.
Breen, R., & Goldthorpe, J. H. (1997). Explaining educational differentials: Towards a formal rational action theory. Rationality and Society, 9(3), 275–305.

Reports and materials that use this theory (Korean)

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Expected utility theoryWhat expected utility theory says about decisions under uncertainty, Daniel Bernoulli's answer to the St. Petersburg paradox, the von Neumann–Morgenstern axioms and Savage's subjective probability, measures of risk aversion, and the Allais and Ellsberg paradoxes.📈 Economics Game TheoryAn intro to game theory: players, strategies and payoffs, von Neumann and Morgenstern, Nash equilibrium, the prisoner's dilemma, chicken and coordination games, and how economists, businesses and political scientists use it.📈 Economics Prisoner's DilemmaThe prisoner's dilemma: game theory basics, the payoff matrix, why the dominant-strategy Nash equilibrium differs from the Pareto optimum, repeated games and tit-for-tat, and examples from pricing, cartels and arms races.📈 Economics Tragedy of the CommonsThe tragedy of the commons explained: individually rational use of a shared resource that leads to its depletion. Covers Hardin's 1968 essay, rivalry and non-excludability, overfishing and climate examples, and Elinor Ostrom's design principles.📈 Economics Framing EffectThe framing effect: how wording changes choices, Tversky and Kahneman's 1981 experiment, gain and loss frames and prospect theory, the three types (risky choice, attribute, goal framing), and uses in marketing and finance.🧠 Psychology Functionalism and Conflict Theory in Sociology of EducationFunctionalism vs conflict theory in sociology of education: Durkheim, Parsons and Dreeben; Bowles and Gintis' correspondence principle, Bourdieu's cultural reproduction, Illich and Reimer's deschooling; similarities and limits.📚 Education

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This article was last updated on October 26, 2026. It is based on widely recognized original works and textbooks; when citing it in a paper, please check the original sources listed in the references.