Editing Rational choice model (section)

== Overview ==
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The basic premise of rational choice theory is that the decisions made by individual actors will collectively produce aggregate social behaviour. The theory also assumes that individuals have [[Preference (economics)|preferences]] out of available choice alternatives. These preferences are assumed to be complete and transitive. Completeness refers to the individual being able to say which of the options they prefer (i.e. individual prefers A over B, B over A or are indifferent to both). Alternatively, transitivity is where the individual weakly prefers option A over B and weakly prefers option B over C, leading to the conclusion that the individual weakly prefers A over C. The rational agent will then perform their own [[cost–benefit analysis]] using a variety of criterion to perform their self-determined best choice of action.

One version of rationality is [[instrumental rationality]], which involves achieving a goal using the most cost effective method without reflecting on the worthiness of that goal. [[Duncan Snidal]] emphasises that the goals are not restricted to self-regarding, selfish, or material interests. They also include other-regarding, altruistic, as well as normative or ideational goals.<ref name="Duncan Snidal 2013 p. 87">Duncan Snidal (2013). "Rational Choice and International Relations," in ''Handbook of International Relations'', edited by Walter Carlsnaes, Thomas Risse, and Beth A. Simmons. London: Sage, p. 87.</ref>

Rational choice theory does not claim to describe the choice process, but rather it helps predict the outcome and pattern of choice. It is consequently assumed that the individual is a self-interested or “[[homo economicus]]”. Here, the individual comes to a decision that optimizes their preferences by balancing costs and benefits.<ref name="Friedman">[[Milton Friedman]] (1953), ''[[Essays in Positive Economics#The Methodology of Positive Economics|Essays in Positive Economics]]'', pp. 15, 22, 31.</ref>

Rational choice theory has proposed that there are two outcomes of two choices regarding human action. Firstly, the [[feasible region]] will be chosen within all the possible and related action. Second, after the preferred option has been chosen, the [[feasible region]] that has been selected was picked based on restriction of financial, legal, social, physical or emotional restrictions that the agent is facing. After that, a choice will be made based on the [[preference]] order.<ref>{{cite book|last1=De Jonge|first1=Jan|url=https://link.springer.com/book/10.1057/9780230355545|title=Rethinking rational choice theory : a companion on rational and moral action|date=2012|publisher=Palgrave Macmillan|isbn=978-0-230-35554-5|location=Houndmills, Basingstoke, Hampshire|page=8|doi=10.1057/9780230355545|access-date=2020-10-31|archive-date=2022-03-10|archive-url=https://web.archive.org/web/20220310113510/https://link.springer.com/book/10.1057/9780230355545|url-status=live}}</ref>

The concept of rationality used in rational choice theory is different from the colloquial and most philosophical use of the word. In this sense, "rational" behaviour can refer to "sensible", "predictable", or "in a thoughtful, clear-headed manner."  Rational choice theory uses a much more narrow definition of rationality. At its most basic level, behavior is rational if it is reflective and consistent (across time and different choice situations). More specifically, behavior is only considered irrational if it is [[Coherence (philosophical gambling strategy)|logically incoherent]], i.e. self-contradictory.

Early [[neoclassical economist]]s writing about rational choice, including [[William Stanley Jevons]], assumed that agents make consumption choices so as to maximize their [[happiness]], or [[utility]]. Contemporary theory bases rational choice on a set of choice axioms that need to be satisfied, and typically does not specify where the goal (preferences, desires) comes from. It mandates just a consistent ranking of the alternatives.<ref>{{Cite book|last1=Grüne-Yanoff|first1=Till|title=Handbook of Risk Theory|year=2012|isbn=978-94-007-1432-8|editor1=Sabine Roeser|pages=499–516|chapter=Paradoxes of Rational Choice Theory|doi=10.1007/978-94-007-1433-5_19|editor2=Rafaela Hillerbrand|editor3=Per Sandin|editor4=Martin Peterson}}</ref>{{rp|501}} Individuals choose the best action according to their personal preferences and the constraints facing them.