Introduction to Rational Choice Theory

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Introduction to Rational Choice Theory

• Way of thinking about politics
• Positive rather than normative
• Methodological individualism
• Deductive moves from assumptions to inference

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Introduction to Rational Choice Theory

• What makes an actor rational?
• Actors have preferences (wants, goals)
• Preference ordering / utility function
• Complete
• Transitive
• Fixed in short-run

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Introduction to Rational Choice Theory

• Preferences
• e.g., My preferences for ice cream
• pistachio P vanilla P chocolate
• Complete
• I have some feeling about all flavours
• Transitive
• I must prefer pistachio to chocolate given that I
  prefer a) pistachio to vanilla, and b) vanilla to
  chocolate

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Introduction to Rational Choice Theory

• Preferences
• Ordinal
• I like pistachio more than vanilla, but I cant
  say I like it 3 times more just more
• No Inter-Personal Comparison
• I cant say my preference for pistachio exceeds
  your preference for vanilla
• Utility
• The satisfaction that I get from a payoff (i.e.,
  an outcome, like a pistachio ice cream cone).

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Introduction to Rational Choice Theory

• Expected Utility
• Preferences are ordinal.
• But thinking in terms of lotteries helps measure
  my utility more precisely
• Do I prefer vanilla (2nd) for certain to lottery
  of 50 chance of pistachio (1st) and 50 chance
  chocolate?
• By altering lottery, you can see how I evaluate
  trade-offs between middling, best worst payoffs

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Introduction to Rational Choice Theory

• Preferences, payoffs, and utility functions
• utility function is a mapping from preference to
  payoff.
• xPy ? u(x) gt u(y)
• u is the function, u(x) the value of u evaluated
  at x
• u x ? u(x)

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Preference, utility, payoff
Introduction to Rational Choice Theory
Utility
Illogical
Ui(x)
Logical
x
X1
X2
X3
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Introduction to Rational Choice Theory
Just a little taste
My Utility
Amount of Ice Cream Eaten
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Introduction to Rational Choice Theory
Exactly the right amount
My Utility
Amount of Ice Cream Eaten
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Introduction to Rational Choice Theory
Too much I overdid it!
My Utility
Amount of Ice Cream Eaten
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Introduction to Rational Choice Theory

• Rationality as Self-Interest
• What do we mean by self-interested?
• NOT everyday selfishness
• NOT just narrow self-interest
• Long-term / enlightened self-interest
• Acting so as to maximize preferences efficiently

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Introduction to Rational Choice Theory
Application to Politics
Joe Voter
NDP
Lib
Con
Left
Right

• Joes utility function -Joe Party
• Which party does Joe rationally support?

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Introduction to Rational Choice Theory
Application to Politics
Joe Voter
NDP
Lib
Con
Left
Right
Joes Utility
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Introduction to Rational Choice Theory

• Strategic Interaction
• NDP and Conservatives do not sit idly by while
  Joe votes Liberal
• Alter their positions to appeal to Joe
• e.g., Harper stays quiet on same-sex marriage

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Introduction to Rational Choice Theory

• Expected Utility
• Joe votes Conservative
• How can Joe be sure that Harper really will cut
  the GST?
• Joe has to factor in this uncertainty
• Expected Utility Utility Probability
• Effectively, Joe choosing over lotteries

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Introduction to Rational Choice Theory

• The Nash Equilibrium
• Actors do as well as they can given that the
  other actors are doing their best too.
• Not about minimizing losses
• About maximizing utility
• Self-enforcing ? logically compelling

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Introduction to Rational Choice Theory

• Winning the Political Game
• Rhetoric persuasion, emotional appeal
• Heresthetic manipulation, instrumental
  rationality