**AIOU **Solved Assignments code MSc 4687 Spring 2020 Assignment 1& 2 **Course: Sociological Theory-II (4687) **Spring 2020. AIOU past papers

**ASSIGNMENT No: 1& 2
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**Sociological Theory-II (4687) MSc (2 Years)**

**Spring, 2020**

## AIOU Solved Assignment 1& 2 Code 4687 Spring 2020

**Q.1 Critically evaluate the approach behind “Rational choice theory” (25)**

Rational choice theory states that individuals use rational calculations to make rational choices and achieve outcomes that are aligned with their own personal objectives. These results are also associated with an individual’s best, self-interests. Using rational choice theory is expected to result in outcomes that provide people with the greatest benefit and satisfaction given the choices they have available.

**Understanding Rational Choice Theory**

Many mainstream economic assumptions and theories are based on rational choice theory. Rational choice theory is often discussed and associated with the concepts of rational actors, the rationality assumption, self-interest, and the invisible hand.

Rational choice theory is based on the assumption of involvement from rational actors which are the individuals in an economy making rational choices based on rational calculations and rationally available information. Rational actors form the basis of rational choice theory and are what make rational choice theory effective. Rational choice theory assumes that individuals are rational actors using rational information to try to actively maximize their advantage in any situation and therefore consistently trying to minimize their losses.

Using rational actors as a basis for rational choice theory, this theory manifests the rationality assumption. Economists may use the rationality assumption as part of broader studies seeking to understand certain behaviors of society as a whole. The rationality assumption assumes that all individuals under consideration are expected to be rational actors making rational choices based on rational choice theory to achieve the very best results for themselves and their own self-interests.

**KEY TAKEAWAYS**

Rational choice theory states that individuals rely on rational calculations to make rational choices that result in outcomes aligned with their own best interests. Rational choice theory is often associated with the concepts of rational actors, the rationality assumption, self-interest, and the invisible hand. Many economists believe that the factors associated with rational choice theory are beneficial to the economy as a whole. Rational choice theory is often dominate across behavioral economics but there are many economists who also study irrational choices.

Elements And Structure

In rational choice theory, agents are described by their unchanging sets of preferences over all conceivable global outcomes. Agents are said to be rational if their preferences are complete—that is, if they reflect a relationship of superiority, inferiority, or indifference among all pairs of choices—and are logically ordered—that is, they do not exhibit any cyclic inconsistencies. In addition, for choices in which the probabilities of outcomes are either risky or uncertain, rational agents exhibit consistencies among their choices much as one would expect from an astute gambler.

**The consistency relations**

The consistency relations among preferences over outcomes are stated in mathematical axioms; a

rational agent is one whose choices reflect internal consistency demanded by the axioms of rational

choice. Rational choice theory holds that all considerations pertinent to choice (that may include

attitudes toward risk, resentment, sympathy, envy, loyalty, love, and a sense of fairness) can be

incorporated into agents’ preference rankings over all possible end states. Social scientists have only

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