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When to Apply Rational Choice Theory

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When to Apply Rational Choice Theory
A widely used model to study human behavior, called Rational Choice Theory, helps to simplify social phenomena by assuming these properties: utility maximization, consistency, expected value, individuals as relevant agents, homogeneity, and equilibrium. Almost all social scientists, especially economists, use this model to predict human behavior, and sometimes their results may contradict the actual phenomenon; in other words, they were unaware that their experiments failed to meet one or more of the Rational Choice Theory assumptions. For example, in situations like enlisting in the military and eventually going to war, where individuals fail to maximize utility and contradicts the assumptions of the Rational Choice Theory, applying the theory would be nonsensical. However, when dealing with situations in which individuals behave rationally like sex workers in the prostitution industry, whereby all Rational Choice Theory assumptions are met, the theory explains phenomena exceptionally well. The example of soldiers going into battle clearly contradicts the assumptions necessary for the Rational Choice Theory to hold. By definition, a rational human being would choose the option that gives him the highest level of utility. In deciding to join the military and fight in war, the costs of making this decision heavily outweighs the benefits. Comparatively, this problem resembles the “Voter’s Paradox” in which Anthony Downs explained using a simple mathematic formula R=PB-C, where R=the utility gained/lost from voting, P=Probability that the vote will be pivotal, B=expected benefit the individual gets when the candidate wins, and C=cost of voting. In my soldiers going to battle example, the R=the utility gained/lost from going to battle, P=Probability that the individual going to battle will affect the outcome of the battle, B=expected benefit the individual receives if they win the battle, C=cost of going to battle. A rational human being would value life above anything offered to him, even the fate of his country. Therefore, the cost of the possibility of losing his own life would outweigh any benefit that winning the battle would bring to that individual. In addition, the chance that an individual going to battle will influence the outcome of the battle is significantly slim, although slightly better than voting in a presidential or gubernatorial election. Furthermore, we must focus on individuals, not society as a whole. Society, in this case the nation, will benefit, but as stated before, the relevant agents are individuals, not society. Therefore, the argument “What if everyone did the same?” does not apply here. The free-rider problem also helps us to explain how people who enlist and fight in wars are irrational; they could realize the same amount of benefit if they win the war even without participating in the act of fighting, which has the potential of death. Next, the example of sex workers in the prostitution industry satisfies the Rational Choice Theory assumptions if we focus only on the workers themselves. Although prostitution is deemed socially unacceptable in many societies, prostitutes exist in basically every country and most prostitutes act “rationally” in the social science definition of the term. Most importantly, the sex workers are maximizing their utility through prostitution. For example, studies of sex workers have shown positive effects for most, including flexible work hours, earning potential, and job satisfaction (Jenkins). Jenkins also concluded that prostitution is not more inherently exploitative than other unskilled labor. The career of becoming a prostitute does not require any education and does not burden the individual with student debts and other expenses involved with schooling. Thus, we do not find many prostitutes with rich backgrounds. As with the soldier example, we must focus our attention on the individual, not society. For the individual, many of these workers have other options but choose to work in this industry because of the positive effects shown in studies on this topic mentioned earlier. Even if prostitution was their only choice, they would still behave “rationally” because of the consequences involved with not conforming. In conclusion, the Rational Choice Theory can only model situations in which the individual acts in accordance with the “rationality” assumptions. If the analysis violates any of the assumptions like in my soldiers going to battle example, then we should avoid using the Rational Choice Theory to model human behavior. Thus, social scientists need to make sure all assumptions of the theory are met before applying it to their analysis.

Bibliography
Jenkins, Suzanne. "Beyond Gender: An Examination of Exploitation in Sex Work." Web. 2 Nov. 2013.

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