Economics Dictionary of ArgumentsHome
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| Rational choice: Rational choice in economics is the idea that individuals make decisions by weighing the costs and benefits of each option and choosing the option that they believe will maximize their own utility. Rational choice theory is based on the assumption that individuals are rational actors who are motivated by self-interest. See also Rationality, Utility, Benefit, Actions, Action theory._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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James M. Buchanan on Rational Choice - Dictionary of Arguments
Boudreaux I 96 Rational Choice/Buchanan/Boudreaux/Holcombe: (…) in the twentieth century economists came to assume that each individual has a set of preferences, what economists call a “utility function,” that is fixed and fully known to him or her. Choices: But, Buchanan noted, if this assumption accurately describes reality, then individuals would not truly choose. If you know with 100 percent certainty that eating the peach will give you greater satisfaction than eating the pear, “choosing” the peach over the pear is a purely mechanical act. Popular language recognizes this fact with the phrase, “It’s not much of a choice,” as in, for example, saying “It’s not much of a choice” when confronted with the “choice” to pay $5 for a glass of beer or $6 for that same glass of beer. For Buchanan, the act of human choice necessarily involves some uncertainty about the merits of one option over another. As he concluded: “If I know what I want, a computer can make all of my choices for me. If I do not know what I want, no possible computer can derive my utility function since it does not really exist” (Buchanan, 1964(1): 217). Buchanan emphasized the open-endedness of choice even further by insisting that human preferences do not exist independently of the very choices that individuals make. Society: (…) Buchanan was insistent that society isn’t a creature with a mind. Society has neither preferences nor the ability to choose. Only each of the many individuals who comprise society possesses preferences, and only individuals have the ability to choose. 1. Buchanan, James M. (1964). “What Should Economists Do?” Sothern Economic Journal (January). _____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
EconBuchan I James M. Buchanan Politics as Public Choice Carmel, IN 2000 Boudreaux I Donald J. Boudreaux Randall G. Holcombe The Essential James Buchanan Vancouver: The Fraser Institute 2021 Boudreaux II Donald J. Boudreaux The Essential Hayek Vancouver: Fraser Institute 2014 |
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