University of Hertfordshire

On the Limits of Rational Choice Theory

Research output: Working paper

Documents

  • G. Hodgson
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Original languageEnglish
PublisherUniversity of Hertfordshire
Publication statusPublished - 2003

Publication series

NameBusiness School Working Papers
PublisherUniversity of Hertfordshire
VolumeUHBS 2003-6
NameEconomics Paper
PublisherUniversity of Hertfordshire
Volume27

Abstract

The value of rational choice theory for the social sciences has been long debated. Such rational choice theory involves a theory of behaviour based on the assumption that individuals are acting, or acting as if, to maximise their utility. The critique developed here focuses on the universality and unfalsifiability of the rational choice approach. In principle it can be adapted to fit any form of behaviour, including the behaviour of non-human organisms. 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. Powerful explanations in the social sciences must focus on the particularities of the human and modern condition. A theory that brings in those particularities as a n afterthought will fail to capture their importance. It is shown that key concepts such as culture and learning fall into this category. The problem with rational choice theory is that, in its excessive quest for generality, it fails to focus on the historically and geographically specific features of the socio-economic systems. As long as social theory is confined to generalities it will remain highly limited in dealing with the specific world, including the one in which we live.

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