On the Limits of Rational Choice Theory
Geoffrey Hodgson ()
Authors registered in the RePEc Author Service: Sheila Christine Dow
Economic Thought, 2012, vol. 1, issue 1, 5
The value of rational choice theory for the social sciences has long been contested. It is argued here that, in the debate over its role, it is necessary to distinguish between claims that people maximise manifest payoffs, and claims that people maximise their utility. The former version has been falsified. The latter is unfalsifiable, because utility cannot be observed. In principle, utility maximisation can be adapted to fit any form of behaviour, including the behaviour of non-human organisms. Allegedly 'inconsistent' behaviour is also impossible to establish without qualification. This utility-maximising version of rational choice theory has the character of a universal 'explanation' that can be made to 'fit' any set of events. This is a sign of weakness rather than strength. In its excessive quest for generality, utility-maximising rational choice theory fails to focus on the historically and geographically specific features of socio-economic systems. As long as such theory is confined to ahistorical generalities, then it will remain highly limited in dealing with the real world. Instead we have to consider the real social and psychological determinants of human behaviour.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed
Downloads: (external link)
http://et.worldeconomicsassociation.org/papers/on- ... ional-choice-theory/ (text/html)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:wea:econth:v:1:y:2012:i:1:p:5
Access Statistics for this article
Economic Thought is currently edited by Kyla Rushman
More articles in Economic Thought from World Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by Jake McMurchie ().