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rational choice theory

  Rational choice theory is a normative theory of individual decision-making that claims that human action is motivated by getting the most for the least. On the one hand, individuals strive to achieve an unlimited set of ends where each end is associated with a different level of utility but, on the other hand, they possess only limited means to realize those ends. The role of the rationality postulate is to ensure that the best ends are chosen given the constraint of limited means. Often couched in terms of the mathematics of constrained maximization, the problem of making the best choices is formally shown to reduce to a formal set of consistency requirements (Hahn and Hollis, 1979). Those requirements define rationality in the sense that if any one of them is contravened the choice is not rational.

The historical antecedents of rational choice theory are with the British classical economists, but it is now most closely associated with their successor, neo-classical economics, and even more recently with a maverick strain of Marxism (analytical Marxism). Not surprisingly, among human geographers the use of rational choice theory is found most frequently in economic geography, and in particular, in the formal location models associated with regional science. Its role there was to impose a determinant order on spatial arrangements, one allowing the theorist to make scientific claims to precision, exact inference and predictability (cf. location theory; locational analysis).

Criticisms of the rationality assumption are vast, and frequently focus on the patently unrealistic characteristics attributed to the rational actor: perfect knowledge; egoism; independent preferences; the ability and desire to maximize utility (minimize costs); and pursuit of a single goal (see satisficing behaviour). Barnes (1996, chs 2 and 3) argues, however, that such criticisms are moot because the rationality postulate by its very construction is empirically untestable, and therefore charges of unrealism have no purchase. A more convincing critique derives from Mirowski\'s (1989) work which uses biographical and historical sources to argue that the rational choice postulate is based on an inappropriate physical metaphor taken by economists from physicists in the late nineteenth century. While that metaphor has provided its users with power and prestige in an age of science, its concomitant physicalist assumptions mitigate any isomorphism with the social world it supposedly explains, and it is now simply a piece of out-dated theoretical physics. (TJB)

References Barnes, T.J. 1996: Logics of dislocation: models, meanings and metaphors of economic space. New York: Guilford. Hahn, F. and Hollis, M., eds, 1979: Introduction. In Philosophy and economic theory. Oxford: Oxford University Press, 1-17. Mirowski, P. 1989: More heat than light. Economics as social physics: physics as nature\'s economics. Cambridge: Cambridge University Press.

Suggested Reading Barnes (1996), chs 2 and 3.



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